May 30, 2009

Are Federal Student Loans Negotiable Instruments?

Filed under: Student Loan

So, I understand that most promissory notes are negotiable instruments. What about a student loan promissory note, where the Guarantor is the Federal Government/US Department of Education.

If a person has defaulted on their studentloan, can that person demand payment from their promissory note to department of education, in order to pay off the debt?

Thank you for your time and informative site!!

Sarah (more…)

May 19, 2009

Student Loan Rich

Filed under: Judgment,Student Loan

Great site. Love the advice given here. Let me see if I can stump the experts. I had some student loans to go to a private college more than 10 years ago. I got out of there but I was in default with a Perkins loan held by the school. Some time ago I contacted the school’s lawyers and got a repayment contract and now I am in good standing with no mention of the default on my CR.

Recently a friend of mine jokingly told me that I could check the Florida clerk of the courts online to see if anyone was suing me so I said why the heck not.

Oh No! I had a judgement against me with the school as the plaintiff. Worse, after a call to the courts I found it was presented by the same lawyers. The judgement was awarded without my knowledge some months before I was negotiating with the school and lawyers for a repayment of the Perkins loan.

Another friend of mine who works at the school now found out that I had a $3000 tuition deferral that went unpaid and was referred to the courts. Now with interest it’s over $10,000.

The judgement is not on my credit report but I am afraid it could show up at any time and mess up my credit. Shouldn’t the lawyer have notified me about that judgement when I contacted them to negotiate repayment on my student loan, considering I did say “Is that all I owe to the school?” (I took notes of the convo). If they mentioned it to me then I would have been paying off $5000 instead of looking at this monstrous $10,000.

How should I go about this? Is there a way to get this reduced to what it should have been? Is there a law requiring the lawyers to have notified me when I contacted them?

Thanks for any help you can give me and keep up the good work.


Rich (more…)

January 12, 2009

Debt Collection Student Loans

Filed under: FDCPA,Student Loan

My question is about student loans. If you find that the student loan collection agency–like Sallie Mae–violated the FDCRA do they have to pay per violation? It’s a $1,000 per violation, right?

Jansen (more…)

November 2, 2008

Bankruptcy Attorney Time

Filed under: Bankruptcy,Student Loan

So what the article is saying is that if they were included into my bankruptcy and they were paid they are to be discarged also. For me the claim was$5642 and on my february statement they haed recieved $84.88. do I still owe the rest or  are they done. I have many other debts that only have a portion of the claim paid and they are discharged.

John (more…)

October 31, 2008

Espinosa v. United Student Aid Funds

Filed under: Bankruptcy,Student Loan

OK, student loans are generally not dischargeable in a bankruptcy unless the debtor can pass the Brunner Test for undue hardship and bankruptcy judges frequently set up roadblocks to confirming a Chapter 13 plan that includes a student loan.  That’s what makes this decision so interesting and consumer-friendly. 

United Student Aid Funds (USAF) was sent notice by the Chapter 13 Trustee that its proof of claim of $17,832.15 would not be included and instead the payment plan to USAF was limited to $13,250.  USAF was given 30 days to object and they didn’t respond.  Espinosa finished the Chapter 13 plan and was given a discharge.  Then, three years later, USAF intercepts tax refunds due Espinosa and that’s what led to this case.  The following text are excerpts from the Ninth Circuit in Espinosa v. USAF:

“Congress made it quite clear that a creditor need only get ordinary notice of a Chapter 13 plan to be bound by its terms….We reject the idea that a creditor who is in the business of administering student loans has a constitutional right to ignore a properly served notice that clearly specifies that its debt will be dischargeable on successful completion of the plan.”

And now for my favorite part:

“The case is remanded to the bankruptcy court for reinstatement of the order enforcing the discharge injunction and for a determination whether the creditor acted willfully in violating the injunction under the standard we announced in Zilog, Inc. v. Corning (In Re: Zilog, Inc.), 450 F. 3d 996 (9th Cir. 2006).”

Espinosa v. United Student Aid Funds (In re Espinosa), — F. 3d —, 2008 WL 4426634 (9th Cir. October 2008)

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

October 30, 2008

Student Loans & the FDCPA

Filed under: Collections,Student Loan

I was just released from my chapter 13 bankruptcy on 6 october. Yesterday I recieved a student loan bill for my wife and they want $4500 which they have been charging and mounting interest up since jan/08. they have sold my debt once to another branch of the Iowa college student aid commission.

Now they are saying if I don’t pay them 100 per month they will send it to collection charge me more fees and interest and take my tax return. Is this legal? And are there any repercusions for them transferi9ng my debt while in bankruptcy?

This det is old I know there is not statue of limitations for student loans but they have to follow the same rules as other creditors right?

John (more…)

July 2, 2008

Student Loan Vagabond

Filed under: Student Loan

After 11 years, I have been contacted by a debt collection agency seeking repayment of my student loans totalling almost $30,000. The collection agency has told me that if I do not begin making payments, a judgement will be entered against me.

I live overseas, so a part of me is thinking “OK, sure, go ahead” because I can’t see a mechanism for them collecting against it.

Can this collection agency collect this debt if I am resident in Europe?


Sabrina (more…)

June 1, 2008

TILA Bankruptcy

Hello Paul,

Thanks for the quick and informed response to my post!

Another question: Since TILA deals with many loans, I wonder if it also applies to student loans. Since private lenders have gotten into the act of lending to students, it seems that it would. Though it shouldn’t matter if the loan was from a government source or private–TILA should still apply.

I take it from your last post (and from the bankruptcy ruling you posted) that these TILA violations would allow through rescission for mortgage debt to be discharged through bankruptcy–even a Chapter 7. Would a bankruptcy attorney know this?

Again, terrific site. Thank you for your contribution to the little guys–I believe that credit is the basis for one’s financial health and you are a balm to the broken!

Leela (more…)

May 20, 2008

Radtastic Credit Repair

All righty… First of all I’m 21 and im distraught because of the debts i owe due to my naiivety of finances when i left my parents home to start college.
Well i ended up dropping out 10 weeks into college and have a $2500 student loan thru Sallie Mae My account status says: Claim filed with government/Past due 180 days.  :S

i have been going thru a bout of unemployment and am about to start working again.  i have no idea what “claim filed with government” means and the consequences therefore associated. 

I am just learning about credit and credit scores. i need help in figuring out what the best thing for me to do to get this mess cleaned up and my score polished a bit. im currently trying to apply for a $4000 loan to pay the collection fees owed to the Michigan Department of Treasury for my Driver’s Responsibility fee which is $3055.
i need to drive to work!  Eeeep!

any advice you can give me on all the above written would be RADTASTIC!  Thankxz!

Tom (more…)

March 27, 2008

Student Loans & Bankruptcy

Filed under: Bankruptcy,Student Loan

Paul, My son, who is 22 years old and a college student that is getting ready to go to grad school this fall out of state, needs to and wants to file chapter 7 bankruptcy on credit card bills and a couple of his private student loans.  We are still investigating the student loans to see if he can include them.  We cannot afford a Bankruptcy Attorney so he is going pro se with my help. 

Here is the question, the two loans he is going to try to include in the BK, his dad cosigned for.  How is this BK going to affect his dad’s credit when my son files BK, or will it?  Is there something my son should do now or his dad do in advance of the BK. 

His Dad will not pay these loans.  He has never given my son a dime.  This is the only thing he has ever done for him financially.  He has not even seen him in 7 years.  What is your advice? 

Thanks so much
Dawn (more…)

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