Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do: (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.

Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

Feeling hopeless with private student loan.

  • Filter
  • Time
  • Show
Clear All
new posts

  • Feeling hopeless with private student loan.

    Well, I got taken by a Ponzi-scheme flight school. My private student loan was made in 2003 with KeyBank and my father co-signed. In 2008 the school declared bankruptcy and made off with the students money, or the banks lost it, who knows, but they left the students with the bill, even signing up students weeks before going bankrupt.

    I haven't been working since 2006 and have been acting as my parents caregiver in their home where I live, and they pay my bills in exchange.

    The $505 payments became due in 2008 and I, or my parents have been paying ever since. My dad was making a nice amount of money from the 3 retirements he earned in his lifetime, so paying me to be a caregiver was no problem. My dad just passed away this June. This has also changed our financial situation. My mom requires 24/7 care and is on SSDI, so her keeping the house going and having money for her medical expenses and paying my bills is no longer a solution.

    I will not be seeing any gainful employment anytime soon, I will be taking care of my mom with my time. My father willed everything to my mother.

    I have 62,000 in private student loans, 15,000 in credit debt, and 2,400 for a Fed student loan that's almost paid off. So about 81k in debt all together with a $1,000 monthly payment for everything.

    I can't save any money, I can't go to school with this much debt to handle, it feels a bit hopeless. To the point of mulling over bankruptcy.

    So what I wanted to ask you good people, will keybank be able to harass my mom over her home even though she wasn't a co-signer? Would this be a good case for adversary proceedings to get the private loan discharged?

    The loan was made in 2003 before the 2005 changes, does the law barring private student loans from being discharged possibly not apply to this loan?

    I don't have any assets, haven't been gainfully employed since 2006, and can no longer make payments. I'm seeking the advice of you more knowledgeable and experienced people.

    I tried to remove my dad as co-signer, keybank said they stopped that option in 2008. I told keybank I was unemployed. I tried to reduce payments, asked for deferments/forbearance and was told no, I need to pay the loan, do whatever you have to do, and if it goes into default that the full balance will become due to the co-signer.

    Thank you for your time.

  • #2
    Welcome to the Forum.

    I am so sorry to read of your loss, and can fully empathize with your care-giving situation, as I had that with my Mother and aunt.

    I am afraid I can't be of much help with your student loans, as I have no experience with one. I am going to say--and I could well be wrong--that I think KeyBank should not be able to go after you Mother, since she was not a co-signer. But I truly don't know.

    Someone with more experience with student loans will be coming along before too long.

    Did anyone ever go after the Ponzi-scheme school? It would be nice if your money and that of the other victims could be recovered.

    We had a *friend*--actually the husband of one of 'Hub's high school classmates try to rope us into helping him with a similar scheme regarding a religious 'school'. He thinks he is a pastor and prophet. We ran from that as fast as we could....
    "To go bravely forward is to invite a miracle."

    "Worry is the darkroom where negatives are formed."


    • #3
      I removed your duplicate post. Please do not post the same question or comment in two or more boards. It becomes very confusing to people trying to follow and answers questions on multiple threads. For that reason, it is against Forum rules. Thank you.
      "To go bravely forward is to invite a miracle."

      "Worry is the darkroom where negatives are formed."


      • #4
        My advice is to not file for bankruptcy, but instead pay off the federal student loan, and quit paying the private student loan and other unsecured debts. You don't have anything which the creditors could take from you, even if they sue and win. Bankruptcy is designed to protect assets which a creditor is trying to take, and it doesn't sound like you have anything to protect. Also, you will not be able to discharge the student loan unless you file and win an adversarial proceeding, which is difficult to do yourself, and very expensive to have an attorney do for you.

        If you let the Key Bank student loan charge off, then the statute of limitations begins running. Most likely, Key Bank will spend a year trying to collect, then sell the debt (at face value) back to the guarantor agency, who will then try again to collect, and then probably sue. Once they get the judgment, the judgment statute of limitations applies. In most states, a judgment lasts for 10 years and can be renewed for another 10. Most likely, if they fail to collect anything with the judgment, they won't even bother to renew it, which means they won't be able to enforce the judgment after 10 years.


        • #5
          My apologies AngelinaCat I will keep the questions to one board. After posting I realized I put it in the Student Loans section but it was also under the After the Discharge section and I hadn't done a bankruptcy yet, hopefully I won't either with your guys help. Or make it as painless as possible.

          Yes people did go after the school! When they opened in 2003 there were even a few students who didn't like how things were going within a few months and were already seeking refunds and finding out how KeyBank deals. The school continued training until 2008 when it suddenly pulled the plug. The majority of students used KeyBank, during the last few years they started using SLX and Citibank for student loans. The lawyers have been successful in getting the Citibank loans forgiven completely, and the SLX loans were given about a 50-75% forgiveness. These were people that were signing up for 72k loan within months of them closing shop. When they started the school and doing the loans with KeyBank, they were 47k, what a huge jump, somebody got a nice raise.

          KeyBank is a whole other monster, and admittedly I didn't do very extensive research into these school loans before getting one, and the more I do, the more I get the impression that KeyBank does zero investigations into the schools it hands over loans to in your name. The lawyers have been in litigation since 2003 with KeyBank and the latest result as of this April here was the latest from one of the lawyers blogs "The larger victory was won by KeyBank, which has now effectively killed any chance of a California class action against it based on the claims asserted in the Kilgore case. Plaintiffs' counsel have informed me that they will not try to appeal this ruling to the United States Supreme Court, so this ruling will be final." "This case was heard by all judges of the court, rather than by a panel selected by them. The legal phrase for this is "en banc."
          Basically several 100's of millions of dollars disappeared, they had better lawyers and a better escape plan, and this is all we have left, grumblings over procedural issues.

          Thank you bcohen! That's essentially how my feelings are at this point. And I think from what I'm getting it would be wise to consult a bankruptcy lawyer just to make sure that would be a safe route. Because I would much rather, pay off my credit debt, and my federal loan, or at least the federal loan and saying, see you in court to KeyBank, you can't get blood from a turnip! Not to mention one of the lawyers up against KeyBank did have this to note on his blog "do nothing. That may sound funny but here is my reasoning: In the more than 5 years that I have been representing former students of Silver State Helicopters, KeyBank has never sued any of my clients and never filed an arbitration proceeding against any of my clients. Why is that? I presume that KeyBank always does what it thinks is in its best interests. Therefore, for the last 5 years, KeyBank must have felt that filing a lawsuit or an arbitration proceeding against any of one my clients is not in its best interests. Based on KeyBank's efforts to enforce the arbitration provision in its agreement with former SSH students, it seems unlikely that it will reverse course and now claim that it is free to file lawsuits against former SSH students instead of complying with the arbitration provisions that it put in the student loan agreements. Private arbitration is expensive and KeyBank would have to pay the costs to initiate each and every arbitration proceeding that it wants to start. Between the initial costs and the costs for retired Judge's time, Andrew August's estimate for the cost of these private arbitration proceedings is $10,000 - $15,000.00 per student. Many of these students don't have the money and will not be able to pay even if an arbitration award is entered against them."

          So there is a lot of truth in what you say bcohen I believe. To be able to live again, gives one hope.


          • #6
            To repeat, I suggest that you pay ONLY the federal student loan. Since Key Bank (or its guarantor agency) is going to eventually sue you for the private student loan, you have NOTHING to gain by paying the credit card either. In fact, if the credit card sues first, and gets a judgment first, that would actually help you, because Key Bank (or the guarantor agency) would see the futility of suing someone with a large unpaid judgment, and therefore might not even bother to sue before the SOL runs out!


            • #7
              That would be ideal, only paying the fed loan, which is $25 a month, and not filing bankruptcy. I never looked at the situation like that and thought the only way to avoid crushing debt was through bankruptcy. But would it be wise to burn the credit cards? I feel bad enough about those that I'd find away to make enough to pay them back at $425 a month. That's $18k that'd I believe I'd be able to pay off and not worsen my credit report? Or would the ding from the private student loans be so great that my credit would be shot so I might as well not pay any creditors, aside from the fed loan?

              And am I to understand that once I stop payments or go into default, that a 4 year statute of limitations(written contracts in California) starts ticking in which keybank could try and sue me?


              • #8
                Originally posted by highspirits View Post
                That would be ideal, only paying the fed loan, which is $25 a month, and not filing bankruptcy. I never looked at the situation like that and thought the only way to avoid crushing debt was through bankruptcy.
                No, the purpose of bankruptcy isn't to "avoid" debt--it's to protect your property and wages from creditors, and it sounds like you don't have anything for creditors to take. Thus, filing for bankruptcy at this time would be a waste.

                Originally posted by highspirits View Post
                But would it be wise to burn the credit cards? I feel bad enough about those that I'd find away to make enough to pay them back at $425 a month. That's $18k that'd I believe I'd be able to pay off and not worsen my credit report? Or would the ding from the private student loans be so great that my credit would be shot so I might as well not pay any creditors, aside from the fed loan?
                Defaulting on debts (except those owed to friends and family, of course) should be a purely financial decision. Morality and emotion shouldn't enter into the picture at all. There's a HUGE difference between defaulting on a debt owed to a private person who desperately needs the money repaid, and defaulting on a debt owed to a large multinational corporation whose business model is to make high-interest loans knowing full well that a certain percentage of the customers will default. In fact, credit card issuers and finance companies charge such high interest and fees for just this reason--they know that a certain percentage of the money lent will never be repaid.

                It sounds like you can't afford to pay the credit cards any more, so the smart thing to do is to quit paying and let them charge off. Don't feel bad for the poor little bank that isn't going to be repaid. You've got to look out for #1.

                Also, don't worry about your credit score. After you let all your unsecured debts default, your credit will really be in the toilet...for a few years. As time passes, your credit scores will creep upward even if you never pay a penny toward the debts ever again. I remember when I quit paying on all my unsecured debts back in March of 2009, and my credit scores bottomed out in the 490 range. But as time went by, the scores crept up to 525-530, even though I never paid the debts, and also got a judgment from Discover card. I eventually filed for bankruptcy, because I am going to college now, planning to graduate in May of 2014, and was told by prospective employers in my field that I needed to pay, settle, or discharge in bankruptcy any defaulted debts in order to be considered for employment. So I did.

                Originally posted by highspirits View Post
                And am I to understand that once I stop payments or go into default, that a 4 year statute of limitations(written contracts in California) starts ticking in which keybank could try and sue me?
                That's right! This is why you are actually better off if one or more of your credit cards sue you and place judgments on your credit report. When Key Bank (or its student loan guarantor agency) sees the unpaid judgments on your credit report, they will think twice before suing you, because the other judgments would be first in line to garnish anything. As a result, it is entirely possible that they won't sue during the SOL (which is 4 years from when the loan officially goes into default) and thus give up their right to sue in the future. Once the student loan is past SOL, you could then file for bankruptcy and discharge the judgments from your credit cards.

                Also, even assuming that Key Bank does sue and win, their judgment has its own statute of limitations. This has the effect of setting their claim period into stone, as once the judgment expires without being renewed (or has been renewed for the maximum time allowed under the law) it is no longer enforceable.


                • #9
                  Well, I would argue AGAINST allowing a Judgment to be placed on you, for the simple fact that, though the creditor may not be able to file a lis pendens against you right now, there will be several years (here in Florida it is ten, and the judgment can be renewed once), that you will never be able to own anything in your own name.

                  If the creditor is determined and mean enough to go after you, that can only add to your worries and headaches.

                  I speak from experience. My husband's [(AngelinaCatHub) otherwise known as 'Hub] Mother's ex-husband and his current live-in floozie, attempted to steal his dead mother's home (a single-wide mobile home) by faking a lost title claim to that trailer, and sell it back to us at an exorbitant price.

                  I won't go any further about that, but the entire episode is worthy of a 'The Sting' type movie.
                  "To go bravely forward is to invite a miracle."

                  "Worry is the darkroom where negatives are formed."


                  • #10
                    I have a quick 2 cents to add since I have direct experience with Key bank.

                    In my situation, although all my payments to Key were current, as soon as my 341 was finalized (chap 7) Key called my cosigner (my mom) and told her that my loan was now in default. And indeed it was. When I called them, they told me that because of the bankruptcy they had the right to default my loan due to "you had a change in circumstance that told us that you won't be able to make payments".

                    The reason I filed for bk in the first place was due to underemployment causing me to use credit cards to pay on the loan for years having never found employment in my degreed field of chemical engineering and working 2 part time jobs to keep a roof over my head. I tried to sue, I tried to plead, tried to reverse the default under many precedents, but they always won. Me and my cosigner were stuck with a defaulted $18k and change on both our credit reports. Key bank is a ruthless corporation and I see no real financial benefit to pay them a cent...ever. They claim they never get your faxes, they have people sign for certified letters and then later deny that the person that signed for it works for them, forget calling - you only ever get to speak to the lowest person on the totem pole but they will lie to you and say they are "escalating your concerns to a supervisor" but it does nothing.

                    My advice to you is: Is all of your late father's assets in your mom's and only your mom's name and she is tied in no way to this key loan? If this is correct I say let key default. Don't even talk to them or answer their calls or letters and hope they sue you sooner rather than later.

                    Never tell them where you live or give them that phone number. In fact, you can get a google phone number that routes through your current phone that will let you call them and give them that number as the only number they can contact you at. They will still try to call your mom and other relatives to get your current address and phone but you can give them a heads up to not give out that info.

                    But at least what I know as fact is that here in PA the law is that they CANNOT take property that is not 100% yours in a judgement. For example: If me and my husband jointly bought a house right now, and key bank sued him for his and only his key loans, the house is off limits because the law says that they can't sue an individual for real estate/property that is co-owned.

                    Another strategy I am first-party witness to is my husband's key bank loans. After our bk, his key loans also defaulted. What happened there though was strange. For 2 years neither him or his dad (co-signer) got any phone calls or letters from key. Neither of them were sued (we have no house but he does have a house and property). I still have no idea why. We scraped together some money because I thought it would be better to try and settle this loan and key did accept a $7000 lump payment on a balance of $19000 as a paid in full wipe out of this loan.

                    It was a blemish on his credit report but after a chap 7 like who cares right lol? So that may be an option for you as well, unfortunately it seems to be totally random who Key sues and when they sue them so it might be a waiting game or they might come right after you.

                    But I agree, in this type of situation you have to take all morality out of your decision - if I had it to do over again, I would have taken my entire salary and paid off my key loan and used my credit cards to pay for everything else in life, once the loan was paid, I would have then went chap 7 to discharge the cards and actually started from a zero point. When you're in that much debt you can't even say you have nothing, you have negative worth.

                    But paying on the govt loan is paramount - the feds can do all kinds of horrible things to you if you let that one default, the privates are still governed by your state laws for collection BUT ONLY after you default. Before that they can raise your interest rates, shorten your payback terms, make your monthly payment anything they want and add on fees no holds bar style. Remember too, that they make money if your loan defaults, the whole scam is hedged. So if you do go that route and they want you to pay them the full amount to settle it, just wait awhile and give them as little as possible because they have already profited off your loan and anything you give them is just more money on their side.

                    Message me if you have any other key bank questions - for awhile I topped the call charts with them and also have several different phone numbers that aren't published anywhere to get to different departments - like their legal department.

                    Sorry for your situation I hope some of this helped in some small way.
                    Last edited by AngelinaCat; 10-30-2013, 06:44 PM. Reason: broke a long post into paragraphs to make it easier to read.


                    • #11
                      Please break your long posts like this one into paragraphs with a line of white space in between each one. While we appreciate what you have to offer, I for one don't have the time or eyesight to be able to wade through and decipher a post like this.

                      Thank you!
                      "To go bravely forward is to invite a miracle."

                      "Worry is the darkroom where negatives are formed."


                      • #12
                        Sorry about that AngelinaCat, I just type as it falls out of my head Can I go in and edit it after its posted?


                        • #13
                          You have a 'window of opportunity' but it doesn't last long, unlike some other forums that let you edit at any time. But I believe that you only have between a half-hour to an hour to edit a post here. You will know when you can edit, because at the bottom of the post box there is a grey bar with the words 'Reply" and 'Reply With Quote'. Those are there all the time. But you will see the word 'Edit' in the same area for a while after you post. After a while that feature goes away.

                          I am at work right now, but when I take a break in a little bit, I'll see what I can do with it.

                          "To go bravely forward is to invite a miracle."

                          "Worry is the darkroom where negatives are formed."


                          • #14
                            Thanks much - I missed the window and will edit next time


                            • #15
                              I completely feel your pain when it comes to your student loans and their ability to effect those you care about the most. The downside is the fact that they can hold the co-signer accountable for the loans. That is the entire purpose of a co-signer. Start by remembering that these companies want you to make the payments. Defaults on loans don't look very good on the books. It would seem that you are dealing with a company that wants to be much more difficult to deal with though. You could consider a debt consolidation company to help communicate with these various companies for you in order to help set up payment plans that work for you. There are options available so don't lose hope.
                              Advertising link in signature not allowed per forum rules.


                              Unconfigured Ad Widget