Bankruptcy Forum

tution debt and my diploma

betpie
05-30-2009, 09:12 PM
I posted this over on the Chapter 7 forum, but thought I might try here for additional feedback.

I currently owe my former university $3K for my last term's tuition (it was summer term and I had used up my financial aid for the year). They are withholding my transcripts AND my diploma until my balance is paid in full.

A lawyer and the school's bankruptcy liaison both told me that while my debt to the university will NOT be discharged in my BK, the automatic stay WILL prevent them from withholding my diploma. However, the school's representative seemed *very* eager for me to call her the moment I file and giver her my file number, and now I am wondering if she is going to try and have the stay lifted before I can get down there and get my diploma.

I guess I'm wondering if this is a realistic fear and what I should do about it. Anyone who's ever been in a similar situation, I'd love to hear about it.

lrprn
05-31-2009, 12:19 AM
Betpie, it's against our forum rules to post the same question in more than one forum area. Most of our members who are knowledgeable and post answers cruise all the forum areas, so it's likely that anyone who was going to answer did so on your Ch 7 post.

In the future, please do not post duplicate questions - thanks!

betpie
05-31-2009, 01:54 AM
My apologies- I meant no harm or disrespect. I simply realized this forum might have been a more appropriate place for my question, again I apologize. it won't happen again.

HHM
05-31-2009, 05:59 AM
1. Tution debt CAN BE DISCHARGED. Only student loans are non-dischargeable. Where you need to be careful in this situation is whether you signed anything converting the tuition debt into a promissory note; if you did, then it is a student loan. However, if the debt is merely unpaid tuition, that debt is dischargeable.

2. The school can withhold your diploma. However, once you file BK, it would be a violation of the automatic stay and of the eventual discharge order if they withhold it.