Student Loan Question

[cso5@]

Ok, so on 13datacenter.com, when I look at my account ledger, it shows my student loans being paid at only the 4.97% that all other non-secured, non-priority claims are being paid.

This can't be right?

How do student loans get paid during a Ch 13, and what happens at the end? Anyone else have this sort of ledger entry on 13datacenter?

Thanks for all the good information here --

Catherine

[lrprn]

Ok, so on 13datacenter.com, when I look at my account ledger, it shows my student loans being paid at only the 4.97% that all other non-secured, non-priority claims are being paid.

This can't be right?

How do student loans get paid during a Ch 13, and what happens at the end? Anyone else have this sort of ledger entry on 13datacenter?

Thanks for all the good information here --

Catherine

Catherine, student loans in bankruptcy can be a strange creature. The only relatively certain thing known is that the all government-sponsored and most privately-sponsored student loans are considered non-secured loans that are in a special class since they cannot be discharged.

How student loans are paid when you are in Ch 13 can vary widely depending on how they are represented on your forms - some of the options are:
1. List the student loan as a regular non-secured creditor who gets paid along with everyone else.
2. List the student loan as a special-class, non-secured creditor who gets paid before the other non-secured creditors.
3. Have the trustee pay the student loan inside your Ch 13 plan.
4. Pay the student loan outside your Ch 13 plan yourself.
5. With the loaner's agreement, the student loan payment can be deferred (make no payments) for the duration of the loan (interest may or may not accrue depending on the kind of loan you have).
6. With the loaner's agreement, the loan is placed into forebearance (reduced payments or postponed payments) for the duration of the plan (interest will still accrue).

If your student loans are being paid at 4.97% throughout your plan, then the remainder of what is left will be waiting for you to start paying again at the end of your plan. Some Ch 13ers choose to keep making payments on their student loans themselves throughout their plans, especially if their plan is set for five years. That's a lot of interest to pay on the other end otherwise.

I'd go back and clarify with your lawyer exactly what is happening. Please come back and let us know what he/she says, ok?