automatic student loan default?

[tictacsir]

does chapt. 13 automatically throw student loans into default even if they're still in deferrment?

[cso5@]

That happened to mine, too!

I was in hardship forebearance, and called Sallie Mae shortly after I filed to see what was going to happen, and was told they were reassigned to the guarantor, New York State Higher Education Services Corporation.

I haven't looked into it much -- I am newly into this bankruptcy thing, having filed in April 2006.

Anyone have any insight?

[lostsoul23]

Under no circumstances should it put it in default if you aren't there already. It should, however, put it into automatic forebarence once they got notification of the bankruptcy filing. If you are ALREADY in default in then file, the status will stay as 'defaulted,' the only difference is that they cannot take collection action while you are in a bankruptcy proceeding.

Hope that helps.

[tictacsir]

I made several calls today including one to united states aid funds (the ones who provided the funds) and talked to a really nice lady who said the loans were sold by sallie male back to USAF and then transferred to another agency for handling. apparently, when you file they are automatically switched to a new agency to deal with bk filers. i told her my credit report stated the loans were in default (which they are not, i'm actually only 2 months out of school, 4 months left on my grace period before i start my payments) and she said it looks like the credit bureau made a mistake. what chaps my hide though is that i only listed these loans in my bk since it was required but still stated in the report that i would continue to pay debtor directly (like with my car). then they go and sell the loan right out from under me which makes me wonder if i lose all the priveleges of a student loan like low interest rate and deferrment/forbearance options. i'm not sure yet because this is also very new to me. considering i hadn't received anything in the mail about it, who knows when i would've even found out.

[$$only4ever]

We have a student loan that we co-signed for our son that is included in our plan. Always been current, never late. Sallie Mae automatically put the loan on an administrative forebearance for the entire time that we are in the chapter 13. To my knowledge ( I used to work for Citibank Student Loans), your student loans do not automatically default because you filed bankruptcy unless they were already in default at the time that you filed, which is not the case. Contact the service people that are handling your loans and find out what they are trying to do. Good Luck.

[tictacsir]

We have a student loan that we co-signed for our son that is included in our plan. Always been current, never late. Sallie Mae automatically put the loan on an administrative forebearance for the entire time that we are in the chapter 13. To my knowledge ( I used to work for Citibank Student Loans), your student loans do not automatically default because you filed bankruptcy unless they were already in default at the time that you filed, which is not the case. Contact the service people that are handling your loans and find out what they are trying to do. Good Luck.

called sallie mae and got a number for the new agency and left a message for them to call me back. hopefully it's just a mistake but at least i know where i should stand. thanks!

[nk29]

The exact thing happened to me, I filed Ch 13 in Aug 2005, and just recently when I saw my credit report, there was this compnay, ECMC (Educational Credit Management Company) that the loan was transferred to. I was told that this is what happens when you file bankruptcy automatically because they are experienced with handling bankruptcies and staying on top of when the discharge happens (so they can start collecting again). My report didn't say I was in default, but it did show up on my Trans Union report as a collection agency. My account is not in collection, just under bankruptcy protection. I called ECMC and they said to dispute with the credit agencies because they are reporting inaccurate information. Sallie Mae also listed 180 days late as of Apr 2006, the month before they transferred the loan. I was never late, I was in voluntary deferment up until after filing! I am just waiting to hear back from my disputes, but if any of you were successful in cleaning this up, I'd be interested to hear from you.

[lrprn]

if any of you were successful in cleaning this up, I'd be interested to hear from you.

Nk29, you've pulled up an old thread that is more than four months old with no activity since the end of August '06. Just wanted to remind you that pulling up old threads is against our forum rules - see the Rules link at the top of every forum area. Most of the posters in this thread are not actively posting any longer and so won't respond to your request.

In the future, please start a new thread of your own rather than using an old thread - thanks so much!

[arkienurse]

Under no circumstances should it put it in default if you aren't there already. It should, however, put it into automatic forebarence once they got notification of the bankruptcy filing.

Is this a new law thing? My student loans were not put into forbearance when I filed.