Should I notify my student loans we are filing? Also ? about auto default on SL

[Forthebirds]

Hi, we are filing in the next week or so. We have student loans w/ Sallie Mae (Federal & private) and a private loan with Wells Fargo. Should I tell them we are filing? Does it even matter if they know beforehand? I would like to keep paying the loans while in BK, is this possible?

Also, will our WF private loan automatically default when we file?? If so, what happens after we are discharged and closed? All loan payments are current.

Thanks!

[ksgirl38]

They'll find out when you file. No need to notify them in advance. Do make sure you have any statements pulled from their websites and the addresses of where to send your payments because once they receive notification of the bk you'll be locked out until discharge. And yes you should make sure you do pay while in bk. They may consider it a missed payment otherwise, even if they don't send you a statement or reminder to pay.

[btbeme]

Some student loans go into automatic deferment when you file; you can always ask for them to do so if you wish. However, unless you ask for or receive notice of deferment, keep paying - even though you may not receive statements.

Important - since you have loans through Wells Fargo, I am hoping you do not bank there (checking, savings, etc). If you do, you need to IMMEDIATELY move your persoanal accounts elsewhere so they are not frozen or seized.

[Nursemikki]

I didn't notify Sallie Mae as I believed they would get the notification along with all my other creditors. Apparently they did not, and I got notification that my loans are now in default. I did speak with a representative and gave them my case # and haven't heard anything since. A recent pull of my credit report does have a notice of Ch 13 bankruptcy plan.

[ksgirl38]

People keep saying that sometimes student loans go into deferment, but I wouldn't trust that. I think that's a misconception. I think sometimes people assume their loans will go into deferment when they don't. You are best continuing to send them a check each month as normal. Besides you'll still have to learn how to budget this in anyway and your loans would continue to grow interest during that time also.

[btbeme]

People keep saying that sometimes student loans go into deferment, but I wouldn't trust that. I think that's a misconception.

Ummmmm...That is what "sometimes" means...that you cannot count on it to happen.

Like a secured loan (on a vehicle, for instance), there are certain pieces of your financial life where you must take forward-leaning responsibility to make sure that all is well so "surprises" don't happen. Staying in contact with your mortgage company, auto loan, and student loan banks makes good sense during a Ch 7, since you will not otherwise receive statements or other communication from them.

As for student loan deferments while in Ch 7, it is usually "ask and ye shall receive" unless you have completely used up your deferment allotment before then.