San Diego: New Ruling Allows Student Loans to be Discharged in Chapter 13!

[willbfree]

http://preview.tinyurl.com/kkvkdu

[willbfree]

Oops sorry. Can a mod move this to the Ch 13 please.

[StartingOver08]

Great post willbfree! Here is the case that the article cites: http://www.************************/.../needelman.pdf

[dingdong]

DANG!

Wish I had filed a 13 and hope the dept of ed would have missed the creditor objection date!

Wouldn't have happened ( well maybe with a little Karma god help, but I doubt it, but still...) I bet that debtor was jumping up and down an peein' his pants.

maybe Teacher Mama will have that kind of luck if she can get the payments within her plan and the creditors fail to object to the plan.

Here's hopin'!

[justbroke]

Well, there are several things that need to occur.

1. You need to be in a Chapter 13
2. You need to add the Student Loan creditor as an unsecured creditor (Schedule F).
3. You just need to file your plan and hope that they don't notice.

In these particular cases, the debtors were lucky that the Student Loan creditor didn't notice and file an Objection to Confirmation. Unfortunately, it continues to be precedence that confirmation can modify the rights of anyone including primary residence mortgage creditors as well! Creditors need to pay attention to Chapter 13 Plans, or be... left out.

[fyi2]

Discharge is a Discharge!

Why is it ok in 13 and not appropriate in 7 ?!?!?!?

[dingdong]

Because the creditors ( here the SL lender) was notified of the plan payments and didn't object. They didn't protect their rights by objecting and thus lost their rights ( as per the judge)

they were paid back a portion of the debt.
in a 7, the debt is liquidated.(wiped out)

[fyi2]

Grrrr....

Slippery

[dingdong]

Grrrr!

Student loans!

just paid mine yesterday.


Double Grrrr!

I would have been a very happy camper if those bad boys had been discharged.

I am going to be drivin' to the post office in my Rascal when they are finally paid off-well I mean... forgiven after the 25 years of repayment.

At least I have that to look forward to.

[justbroke]

Discharge is a Discharge!

Why is it ok in 13 and not appropriate in 7 ?!?!?!?

Because in a Chapter 13, you write a Plan. A Chapter 13 does offer a better discharge (a few more things can be discharged) than a Chapter 7.

The issue with Chapter 13s, is that the Plan is binding on all that are addressed by the Plan, and especially those creditors which submitted a proof of claim. It's basically new terms and can (and does) alter the terms of most contracts/agreements! Mine specifically has a provision which destroys (makes void) any "arbitration" agreement in any agreement/contract I signed!

[HHM]

Note, not to rain on the parade, but this case is still the exception. Also note, I will have to re read it, but if I recall, this was a chapter 13 filed back in 2001 (or something like that, but in any event, I believe it was pre-2005 law).

[justbroke]

Also note, I will have to re read it, but if I recall, this was a chapter 13 filed back in 2001 (or something like that, but in any event, I believe it was pre-2005 law).

Yep, it was a 2001 case (12/6/2001). I don't know myself if it has impact on BAPCPA, but this was decided in 2009, and there is no mention, vis-a-vis, BAPCPA pre or post for that matter.

I wholeheartedly agree that this is a one in a million case. It is not that easy to get a Plan confirmed without certain creditors complaining when their rights are being modified (like mortgage creditors, student loan creditors, HOAs, government entities, etc).

[rrockinggramma]

is this true for government loans as well, or just the private lenders?

[CH33 Paralegal]

Speaking as someone who paid for their education and has no student loans, I perceive even the notion of being able to discharge this debt as being completely FLUCKED UP and I want my mother ****in money back.

[justbroke]

speaking as someone who paid for their education and has no student loans, i perceive even the notion of being able to discharge this debt as being completely $#*$&*#(! Up and i want my mother $#*@#&*$ money back.

lol