Can the local University tell us no?

[mdo23]

In our Ch 7 case, we included a local University where my wife took classes. The reason they were included in the bk was becasuse they messed up her financial aid when she applied and in the end said she owed them almost $4000 for just one semester. Anyways, since they are included in the bk, could they deny her future admission to the university because of this? Also, this is a private university in WV.

[HHM]

In our Ch 7 case, we included a local University where my wife took classes. The reason they were included in the bk was becasuse they messed up her financial aid when she applied and in the end said she owed them almost $4000 for just one semester. Anyways, since they are included in the bk, could they deny her future admission to the university because of this? Also, this is a private university in WV.

I believe they could deny her admission for the upcoming semester. If there is an unpaid balance, regardless of BK, they can deny admission. Somewhat of bummer, I know.

[mdo23]

The balance is actuall a few years old. I didn't know if there was some type of protection from this. I'm sure it being private that they could really pretty much do what they want.

[lrprn]

The balance is actuall a few years old. I didn't know if there was some type of protection from this. I'm sure it being private that they could really pretty much do what they want.

Problems with student loans before filing can be messy in bankruptcy when you do file - some questions for you...

Does your wife still have her original student loan contract? If $4,000 is wrong, how much she did actually borrow for that semester? How much did the university disperse to her for that semester? Did your wife use the money solely for her tuition/living expenses? Did she finish the semester? Does she owe for other semesters completed before this one? Has she tried to dispute the loan amount owed before now?

HHM is right - the majority of private and state universities, junior colleges, technical schools, etc will not allow a student to register for another semester if there's an outstanding balance owed from previous semesters and more than a year has gone by since classes were taken.

And lastly, student loans (even private ones) typically cannot be wiped out unless your wife can prove undue hardship (99% impossible to do), the school went out of business before the semester ended, or the school engaged in fraudulent loan activities.

[mdo23]

Actually in this particular debt, there is no student loans, this is between us and the university. The financial aid dept. messed up the paperwork when my wife registered, and when we caught it, it was too late. So the debt is directly between us and the university, no student loans.

[lrprn]

Actually in this particular debt, there is no student loans, this is between us and the university. The financial aid dept. messed up the paperwork when my wife registered, and when we caught it, it was too late. So the debt is directly between us and the university, no student loans.

I'm still confused, mdo....how did your wife receive money from a university financial aid department but the money she received is not considered a student loan?

[HHM]

I'm still confused, mdo....how did your wife receive money from a university financial aid department but the money she received is not considered a student loan?

I am guessing that the school never properly submitted the financial aid paperwork, or there was some deficiency in the paperwork that made it so she never received the financial aid, and therefore, was billed for the tuition.

However, it is still a little confusing how this could have happened and yet she was able to finish the semester? No offense to this threads originator, but without more info, something seems a bit remiss here to be entirely the universities fault.

[wrinkleigh]

Basically, they disbursed financial aid money to her account -- then realized someting in financial aid was not done, so they removed it, leaving the University with a tuition / fee receivable, correct?? This happens a lot.

Well-- you can bet that when they receive your proof of claim / notice-- first thing they will do is consult with their attorney. You can include it -- they will challenge it, but "technically" the university probably does not have a leg to stand on. This is a gray area with university collections, the employees or administration dont really understand it.

What will happen, is they will put a permanant record hold on your account, which means that you will not be allowed to get a transcript. If you need a transcript they are allowed to keep the hold in place, but they MUST release your transcript to you if you make a written request.

Most colleges/universities have what is called "write off and reserve" accounts for bad debt. Your debt is "reserved" after one year and "written off" after 2 years. In the case of a discharged debt -- they will probably follow their standard procedures and write it off in due time. The most important thing to remember is that they may not under any circumstance contact you about the debt after you file. If they do, they are in violation.

The hold will remain on your account with the University forever -- so always have a copy of your discharge in hand when dealing with them.

Good luck to you.

[HHM]

Basically, they disbursed financial aid money to her account -- then realized someting in financial aid was not done, so they removed it, leaving the University with a tuition / fee receivable, correct?? This happens a lot.

Well-- you can bet that when they receive your proof of claim / notice-- first thing they will do is consult with their attorney. You can include it -- they will challenge it, but "technically" the university probably does not have a leg to stand on. This is a gray area with university collections, the employees or administration dont really understand it.

What will happen, is they will put a permanant record hold on your account, which means that you will not be allowed to get a transcript. If you need a transcript they are allowed to keep the hold in place, but they MUST release your transcript to you if you make a written request.

Most colleges/universities have what is called "write off and reserve" accounts for bad debt. Your debt is "reserved" after one year and "written off" after 2 years. In the case of a discharged debt -- they will probably follow their standard procedures and write it off in due time. The most important thing to remember is that they may not under any circumstance contact you about the debt after you file. If they do, they are in violation.

The hold will remain on your account with the University forever -- so always have a copy of your discharge in hand when dealing with them.

Good luck to you.

Great info, thank you for hte post.

[mdo23]

Yes, thank you for the information. I guess we would have to contact the university regarding the "write off and reserve" policy, if they even have one.