Student loans and the automatic stay

[kl030505]

So, we are finally ready to file!!! We meet with the attorney on Tuesday morning to go over the paperwork and sign whatever. I can't believe it took us a YEAR to get here!

Anyway, I just want to double check something as I prepare my Feb monthly budget. We both have student loans, and while I know that we will eventually have to repay them, they are still a part of the automatic stay, right? I won't be penalized if I skip payment on them until discharge (I know I will accrue interest, but it's 2.8% so I'm not overly concerned about it for 3 months). The payments for the both of us together is about $300, which I can pay if necessary, but it would be great to hang on to any extra cash since we'll vacate the house soon and need money for potentially a double deposit to get someone to rent to us, moving expenses, etc. I am budgeting that I can miss payments for Feb, March and April, if that is not correct please let me know so I can rebudget.

[MomIcantFindmy]

I would not assume they are part of the automatic stay. Ask your lawyer. We had student loans and we put in a foreberance just for now to get us through. We based it on economic hardship. We plan to start paying again soon but it is getting us through these few months.

[my4devils]

I second that. My husband and I also deferred our loans for a year due to economic hardships. They gave us no trouble at all- one little form to fill out and that was that. Now we dont have to worry about them until November.

[needafreshstart]

I had student laons that I quit paying on before I filed, they had called shortly after I filed and I told them I filed bankruptcy, they deferred the loans. The only thing is I don't know how it affects your credit by not paying, ie. if they show it as late or simply deferred.

[cj0203]

I worked for a student loan company and when we got notice of a BK we put on a BK forbearance, so no payments were due. I'd call and ask your lender if they have anything similar.

[no_it_all]

Anecdotal, but my student loans (and I assume this applies to everyone) were changed from <past due> to <pays as agreed> once the deferment or forbearance has been granted. Yes, the credit reports were updated with the new info....Well, that is what Citibank did for me anyhow...

[kl030505]

follow up

Just wanted to follow up.

I spoke with the attorney, and yes, student loans are included in the automatic stay. They will not be discharged, but during the 90 day process at least they are put into forebearance automatically and so you don't need to make payments after you file before discharge. It's not a huge deal, but for us, while we are saving to get into an apartment, it's a matter of about $300/month that we can keep for a couple of months, so that is good.

[HHM]

There is nothing in the BK code that says student loans go into automatic forbearance, so I would not assume that is the case. It just happens to be that most student loan servicing companies place BK'd student loans in forbearance. Thus, I would call your student loan servicing company to see if they place loans in forbearance once BK is filed.