paying student loans inside chapter 13....

[drowninginflori]

Last week when we met with the paralegal at our attorney's office she went over our plan amount and told us how much we would pay (around $1,300 including a car and unsecured debt) and briefly mentioned something about my student loans. We thought by what she said that they would be paid outside of the loan but she said not to do anything until she told us to. My current consolidated student loans come out of deferment next month and they have already sent me my first bill. We have been thinking about this and called the lawyer's office back today and ask them to clarifiy. His paralegal stated that we will be paying a portion of what we owe through the bk 13 and the rest we will be responsible for after the bk has been discharged 5 years from now. Has anyone ever done this and if so did they have any problems with their student loan servicing company?

[liz417]

I've heard a few case where they were able to include their student loan payments in their expenses. It just depends on your district/trustee. Our attorney told us that the student loans would be put in deferment until our 5 year repayment plan was complete (sucks for us because we have to continue to pay interest!), but I've also read where people continued to make payments to their loan throughout the repayment program.

Consider yourself lucky!

[rrockinggramma]

The minute you file for BK it will once again "defer" your student loans. I am with the Dept of Education. The trustee sent payments as unsecured creditor based on the claim filed by the Dept of Ed. Once discharged, I am then responsible for picking up the remaining balance until they are paid off.

One thing that happened to me is that the credit bureau's today decided to list all 4 of my students loans as Included in Bankruptcy. The balance still shows on Experian and Equifax but not on Transunion. I disputed today to reflect a zero balance.

Because they are now listed as included in my bankrutpcy, they will fall off my credit report in 09 and 10. So that is a plus for me.

[drowninginflori]

My concern is that since my loans are pretty big (part of my bachelor's, my entire master's, and other courses required by my job) are included. I am sure what will be paid during the bk13 will be minimal to the entire amount owed. I guess what I need to know is when we are discharged 5 years from now will I be able to pay back on the same scheduled originally agreed upon by my student loan processor or will it show up in collections some where? My lawyer told me not to pay additional to the servicer because it would make my payment plan for the 13 null and void (I had considered just paying interest while in the bk 13 repayment process but not if it will mess up our plan). Any thoughts?

[HHM]

Technically, the student loans are "part" of your chapter 13 and are a general unsecured debt like any other. So in that respect, you are "not supposed" to pay them outside your plan. And as others have pointed out, the loans are placed into deferment during the BK. If the student loans file claims in your chapter 13, they will get whatever percentage they get.

In the big picture, assuming you "pad" your plan. You can make voluntary payments to your students loans (i.e. interest) if you can afford it. However, that is all done behind the scenes.

[liz417]

My concern is that since my loans are pretty big (part of my bachelor's, my entire master's, and other courses required by my job) are included. I am sure what will be paid during the bk13 will be minimal to the entire amount owed. I guess what I need to know is when we are discharged 5 years from now will I be able to pay back on the same scheduled originally agreed upon by my student loan processor or will it show up in collections some where? My lawyer told me not to pay additional to the servicer because it would make my payment plan for the 13 null and void (I had considered just paying interest while in the bk 13 repayment process but not if it will mess up our plan). Any thoughts?

We have about $70k in school loans and our payment(s) were a little over $400/month and when we are done with ch 13, we will "pick up" were we left off...that payment will be larger due to the interest. I was told you can make "extra payments" while in a 13, just make sure the payments are being applied to the loan, as some posters have stated that some school loan companies "collect" your payments and apply them to the loan AFTER you are done with your chapter 13!!!
Good Luck!

[kmb]

I'm paying my student loans through my Chp 13 and they are about $130K total. The US Dept of Ed is actually getting about 60% of my monthly payment, with the rest going to the unsecured creditors. They are actually getting more now than what I was able to pay them on my own, so in my case, I'm actually thankful they are included, as I wouldn't be able to afford to pay them what they are getting outside of making my plan payment too.

[itneverends]

My SL's are included in my plan and will get the lion's share of what I paid into the plan. Before I filed, my SL payment was around $300/month, the trustee has been sending them $500/month. So I am actually coming out better than if I had continued the payments outside the plan.

I do find this odd. Since I am in a 67% payback plan, if the SL's would have been put into deferment or even just paid outside the plan like many others had to do, I would have easily already paid back the remaining unsecured at 100%. Since the SL's survive the CH13 anyway, I never understood why they would also get the biggest chuck of funds paid in as well. Not complaining because I end up much better off, just don't understand the logic.

I went into this owing about $26K in SL's and will come out owning less than $8K on them with all other debt discharged.

[woeisme]

My trustee allowed for student loan payments to be included in my expenses but are paid outside of my trustee payment. However, even though I kept making my payments as usual, the student loan company (Nelnet) decided that since I was in CH 13, that was sufficient for them to declare that I had defaulted on my loan, and so sent it into default status and the federal guarenteor agency paid them for it, and now I owe the guarenteor instead of the original loan company. It ticked me off because I was never even late with a payment and now have it showing up as defaulted on in my credit reports. However, after talking to the new student loan servicer, they assured me that they would remove the default status off the loan once I had made a year of on-time payments, but that they wouldn't start to do that until my CH 13 is over, so I guess for the next 5years it will list as defaulted... but since I'm not looking to get credit anyhow, guess it's not a big deal.

[rrockinggramma]

I found out yesterday that because my student loans are stating as IIB they will now fall off my credit report much sooner, even though I still owe on them. Have them show as derogatory however killed my utilization and tanked my score

[ccgirl]

My student loans are paid outside of my plan. My lawyer said if I wanted to raise my plan amount the extra $200 a month that I pay in the loans he would include them in the plan, but that the whole $200 for the loans wouldn't go to the loan because of administrative fees at the trustees office

[drowninginflori]

I am not sure what percentage of our payment will go to the student loans (it can't be much because we owe $53K in cc, $32K on a car, and about $90K in SL). Our plan calls for us to pay $1300 for the first 4 years and $1800 for the last year. When you do the math the amount going to the student loans is minimal. I would like to at least pay the interest each year because over a 5 year time frame that will add a ton to my balance.