Education Loans in Ch 13 - 2 questions

[lrprn]

My husband took out several educational loans over the five years our son was in college - he had them combined into one $21K loan a year ago. We know this loan can't be dismissed by Ch 13...just wondering how others have handled education loans on the Ch 13 forms and how payments are made to the loan creditor when the plan is in place.

(1) Did your lawyer list your education loan creditor(s) as a "special class creditor" or as a regular non-secured creditor along with all the credit cards, etc?

(2) After filing, is the education loan creditor paid directly by yourself or is the payment being made to them by your trustee?

Thanks!

[Minnymouth]

Govt. student loans for education are handled different then loans thru a bank for education.... Govt loans are not dischargable....... bank loans are!!!
If you used your property or a signature loan for an eduational loan ( or possible equity loan), then that is dischargable in BK.....

Student loans are normally paid out-side of the Chapter 13 plan....

Have your attorney look over the loan papers real close.... it has to say a certain thing to be stated as a "studet loan"....

Someone with more knowledge in this area on the forum, may jump in here and help you with this......

[lrprn]

Thanks for responding, Minny!

Our lawyer was thinking along the same lines you are, so we investigated whether this was considered an educational loan very carefully. Since the loan is a Federal Parent PLUS loan through American Educational Services and was made for the sole intent of providing funds to cover college expenses for our son, it is considered a student loan and is non-dischargeable in bankruptcy [see http://finaid.org/questions/bankruptcy.phtml under the Discharging Student Loans Through Bankruptcy section for a good, 'non-legalese' explanation]. We will have to make payments on this loan during our five Ch 13 years, and continue to pay on it after that until it's paid off in full.

Personal aside...the irony of this is that our son quit college three courses short of graduating and joined the Army last year. I'm very proud of him for fighting for our country (he's headed to Iraq in Sept), and fortunately for him, since he's active military, all his student loans will be forgiven.

Thanks for the info about typically paying student loans outside the plan - it's helpful. My husband asked our lawyer on Monday what we were doing, but he forgot the answer [BIG sigh with rolling eyes here]. I emailed our lawyer this morning about it, but am still curious to know what other 13ers here have done under the same circumstances.

[$$only4ever]

We have been in a Chapter 13 for over 1 year. We, too, have a Parent/Plus loan. The lender filed a proof of claim and the trustee sends them $$, but even though the loan is in an administrative forebearance, we continue to make monthly payments on it so the interest will not get capped. This loan could be paid off when my bankruptcy ends which would be sweet.