Creditor not accepting discharge

[marzipan13]

A college that I attended in 2005-2006 will not accept the discharge. I consulted a lawyer and he agreed that it should have been discharged.
I owe them for tuition, fees, and books because the student loans that I had received were canceled and refunded to the lender.
I made no agreement with the college that I would pay this debt.
Well, they sent me to collections. It's nearly $8000! The only payment plan available is 20% down ($1500) and about $260 month for 2 years. I'm unemployed, my husband makes less than $20k. There is no possible way for us to pay this. I don't own anything, we live with my grandfather.
I've been out of work for almost a year and my unemployment extension is about to run out. I've applied for 1000 jobs since last year and only received a dozen interviews, no job offers.
If the college hadn't canceled my student loans and I owed this money to sallie mae, I could atleast get a deferment due to economic hardship. But college won't do it and on top of it, there's 17% interest on this debt!

My BK case is discharged and closed. Am I able to reopen my case and do something to dispute this debt or do an adversary proceeding? Is there anything I can do to fight this? We might be able to scrape a little money together to retain a lawyer, the one I spoke to before seemed like he would help if I needed it, unlike other lawyers who are unwilling to take closed pro-se cases.

I just don't know what to do and I'm can't sleep or eat!

[HHM]

Didn't you ask this before (maybe it was someone else in the same scenario).

There are a couple different routes you can take...

1. Keep fighting with the school directly, but make sure you end up talking to the general counsels office. There is some case law that basically states that so long as these debts were not converted into promissory notes, the debt are dis chargeable.

2. The other option, reopen your BK case and file an adversary proceeding alleging 2 things (1) that the debt was dischargeable and (2) violation of the automatic stay. Bottom line, you may have to reopen your BK.

[marzipan13]

In response to your #1, does that mean that after the federal students loans were canceled as long as I didn't sign another promissory note reaffirming these debts with the school, that it can be discharged?
After the federal loans were canceled and sent back to AES (american education services), I didn't sign anything with the college indicating the debt was now with them. The Mastor Promisorry Note with AES says nothing about if the debts are canceled that I will need to reimburse the school.
I tried calling the school's general counsel, they don't have one! There is only their accounts receivable lady who sent me to collections without legal advice!

Do you have any idea how much it might cost to reopen my bk case and do an adversary proceeding? There is a lawyer that I think might take on this issue and he was going to reduce his fee because I was unemployed.
But if it ends up costing me $8000, what is the point?

Now if I wait for them to file a judgment against me, which could be anywhere between 6 months or more down the road, can I dispute the discharge at the judgment hearing with the help of a lawyer?

I've tried arguing with the school since it was discharged and they won't give up. So, what is the better road for me?

Reopen the case, do the adversary proceeding or wait until they file a judgment against me then fight it?

I can't file a complaint that this repayment of this debt would cause undue hardship? I know that I'd need to show that I've tried to make payments, but before the school sent it to collections I was still trying to fight it, now the collection unit wants too high payments that I cannot afford.

[HHM]

Your best option is probably to reopen the BK case. You would not be filing a complaint to discharge the debt on hardship grounds, you would be arguing that the debt does not fall under the Student Loan exception to discharge. That proceeding should be considerably less expensive. It will amount to the submission of legal briefs on both sides, some documentary evidence, and a hearing.

If you wait for a lawsuit, you will probably end up back in BK court anyway. The state judge will probably not rule on the issue and refer you back to the BK court to make a determination.

I can't even begin to ballpark a figure for you, but since an attorney would be jumping into your BK after the fact, I would guess $1,500-$3,000.

But as to your question, if the school and you never converted the debt into some type of loan or promissory note, then the debt amounts to unpaid tuition which is dischargeable. The link to the case I believe is floating around on this forum somewhere.