private student loans

[SendRelief]

The bulk of my privated education loans are non-certified...and they are huge...which will cause undue hardship (which hopefully will be my other option to deal with them). But out of curiosity, did you push your attorney to review the documentation around the private loans?

For example, the Tuition Answer marketing material actually calls it a personal loan. These loans (the ones where the check came directly to you) are not considered qualified under the education guideline b/c they are not backed by federal funds. They were private consumer loans with "Education" tagged in the title - but otherwise, were totally credit-based.

I'm also curious if anyone has heard anything about the recent legislation regarding taking private education loans out of bankruptcy protection. It was introduced on April 15, 2010 - so I'm curious as to when the vote will occur. There is legislation seeking that all private loans be treated as though they were the same as credit card debt. *fingers crossed* that passes quickly.

I am so underwater with this situation.

[Amy26]

Unfortunately, I was in the same boat as you. And my loans were not permissable to be included in my bankruptcy. After bankruptcy, I still have over 100k in student loans majority of which are private loans as you described.

[SendRelief]

I am in a situation of drowning solely under private non-certified education loans...and after reading Fake Name's post. I am curious was he able to get his private education loans discharged under Ch 7.

My private non-certified education loans were sent directly to me w/o school certification...which I have pulled govt documentation that says that they may not be recognized as qualified education loans with protection under bankruptcy. The reasoning is that the loans were used for living expenses - and even note in the marketing that they are personal loans. I already had federal loans to cover my actual tuition and fees - and these funds were not part of my cost of aid.

Does anyone have any experience with something similar and the outcome in bankruptcy? I know that federal loans and private education loans used to cover the gap between fin aid and the cost of attendance are protected and must be repaid unless they cause an undue hardship. These loans were considered personal loans - but titled "Education Loans" - so not truly anything more than a personal loan.

These loans are a huge mistake of my past (due to another huge mistake - ex significant other...who also left me w/ sizeable credit card debt that I have finally repaid) - and I had every intention to repay, but cannot see the light of how even if I made a sizeable salary. The bank simply overextended credit to me - then promised consolidation at low payments - which no longer exists.

I am worried sick over how to get past this and on to a fresh start in my life. Any insight would be greatly appreciated.

Thanks!

[frogger]

I got yelled at on another forum when I asked about BK friendly private loan consolidators and was told I needed to change my lifestyle etc

Don't worry. Karma will be around to yell back at those type of people. You're in a good place here among friends.

[FakeName]

[redacted]

[Dst1]

Actually you are on to something here.

No, he's not on to anything. It's a bunch of nonesuch by someone who hasn't a clue about what the law says.

I am going to post some case analysis regarding undue hardship on this forum in order to clear up some of the confusion that seems to be on this board. There are quite a few interesting cases out there and because they are so fact driven and individualized, I think it will help folks in their quests to prove undue hardship.

I don't see any confusion on these boards for you to clear up and even if there was I don't see how posting a bunch of random cases that are admittedly fact specific is going to do anything but cause even more confusion.

[adgardine]

Non-certified loans

I'm running into something similar, but I'm not so sure that just because a loan says "education" in the name it is excepted from discharge...

Though debts for most student loans are excepted from discharge, I contend that the private loan I received - the "Wells Fargo Educational Connection Loan" - is nothttps://www.finaid.org/questions/ban...imitations.pdf

Actually you are on to something here. I have been doing the same analysis myself and can see where this might be something worth considering in an adversarial proceeding. Especially if you are already arguing for an undue hardship. If you want some more information on this subject, please PM me through the forum.

You will likely not find many attorneys even bk attorneys who will really understand and have done their homework on the nature of undue hardships and AP's. This is because most BK attorneys are merely turning and burning clients and do not want to be bothered since many BKers needing an hardship discharge don't have any money to pay for what it will cost to make a college try for an AP.

I am going to post some case analysis regarding undue hardship on this forum in order to clear up some of the confusion that seems to be on this board. There are quite a few interesting cases out there and because they are so fact driven and individualized, I think it will help folks in their quests to prove undue hardship.

[nc73]

It's a good thing though that most think bankruptcy is taboo. If they didn't everyone would file even if they had other options.

[GettingGoing]

While private student loans are non certified and do not go through the school, you still have to show proof of enrollment and the amount they dispurse has to be within the maximum tuition allowed per year for your school. They are not bareft of school involvement. They are also treated differently in regard to term and interest rate. You will not get a signature loan with a 20-30 year repayment term.

No matter how you slice it... student loans are here to stay. I am in a huge pickle myself because my total student loan payment would be well over 500 dollars a month (they are in deferrment right now) and I don't have 500 dollars a month in my budget. I got yelled at on another forum when I asked about BK friendly private loan consolidators and was told I needed to change my lifestyle etc ... anyways...

I will agree that other forums are not very pleasant when they see the term "bankruptcy". I will not post on any other forum except this one for that very reason.

[Amy26]

While private student loans are non certified and do not go through the school, you still have to show proof of enrollment and the amount they dispurse has to be within the maximum tuition allowed per year for your school. They are not bareft of school involvement. They are also treated differently in regard to term and interest rate. You will not get a signature loan with a 20-30 year repayment term.

No matter how you slice it... student loans are here to stay. I am in a huge pickle myself because my total student loan payment would be well over 500 dollars a month (they are in deferrment right now) and I don't have 500 dollars a month in my budget. I got yelled at on another forum when I asked about BK friendly private loan consolidators and was told I needed to change my lifestyle etc ... anyways...

[backtoschool]

Private student loans are exempted from discharge just like federally subsidized ones.

They can report non-payment post discharge to your credit report.

If you default, they can go through collection activity.

[FakeName]

Not so fast!

I'm running into something similar, but I'm not so sure that just because a loan says "education" in the name it is excepted from discharge...

Though debts for most student loans are excepted from discharge, I contend that the private loan I received - the "Wells Fargo Educational Connection Loan" - is nothttps://www.finaid.org/questions/ban...imitations.pdf

[nc73]

thought it was almost impossible for students loans to be discharged

[lovebirds]

I had private loans through Sallie Mae before I filed Chapter 7. I also had regular student loans. My lawyer told me not to pay any loans but that after I will still be responsible for them. Well unfortunately for me, I didn't take his advice. I never paid late on my loans but when I filed I stopped receiving statements from them. I called and was told that the loan was in deferment but that once I finish bankruptcy I will still be responsible so I paid as usual. Sallie Mae I did the same thing since I thought it wouldn't be discharged but it was! I paid Sallie Mae 3 months for nothing! They gladly took my money.
If Wells Fargo wasn't discharged you are responsible and yes it will show up on your credit report. Sorry.

You paid for 3 months for nothing. You mean, they didn't credit your account for those 3 months?

[Crazzyjen]

I had private loans through Sallie Mae before I filed Chapter 7. I also had regular student loans. My lawyer told me not to pay any loans but that after I will still be responsible for them. Well unfortunately for me, I didn't take his advice. I never paid late on my loans but when I filed I stopped receiving statements from them. I called and was told that the loan was in deferment but that once I finish bankruptcy I will still be responsible so I paid as usual. Sallie Mae I did the same thing since I thought it wouldn't be discharged but it was! I paid Sallie Mae 3 months for nothing! They gladly took my money.
If Wells Fargo wasn't discharged you are responsible and yes it will show up on your credit report. Sorry.