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Chicagofashn

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Private Student Loan Discharge and Chapter 7 Bankruptcy
Back in June of 2015 I filed bankruptcy and was discharged in August 2015. On my credit during the time of the bankruptcy petition I noticed that my student loans were completely removed from my credit report and was told this was due to the bankruptcy law. Well after the case was discharged all of my student loans came back onto my credit, however the Private Loan (the one that accounts for 40% of my student loan debt) had a statues different from the federal loans, that stated it was closed and discharged in Chapter 7 bankruptcy. It also shows a zero balance and in the notes reads, "Chapter 7 Bankruptcy: Bankruptcy Petition." I also checked my student loans through my online portal and it showed that I needed to pay $16,137 as my first payment since the bankruptcy since I had missed so many payments before, which is half of the loan! Will I be responsible for repaying those amounts or did the bankruptcy take care of this debt? I also got a message upon logging into my account that they were aware of the bankruptcy filing and whether or not the loan would be discharged, the system may not be reporting accurate information. I am completely stumped and could not find a similar situation to my circumstance ANYWHERE! If you are knowledgable about this subject please chime in! I do want to reiterate that since my discharge all of my federal loans are "open" and updated, the only one that is not displaying an active account is the Private student loan, which currently shows a $0 balance and Chapter 7 discharge note. I do want to remind you again that ALL of the student loans were taken off my credit report during the bankruptcy and put back on after the discharge. Also before the filing this particular account (private student loan) was showing a high balance and delinquent status... hope this gives you a good understanding of my situation.

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Re: Private Student Loan Discharge

Of course I am not a lawyer, this is not legal advice, etc., but here's the most important thing from my experience: if this was truly a student loan, the owner of the debt can still legally collect on it after bankruptcy even though it was a private loan.

So here's what I would do:

1) Find out for certain whether the private loan was really a student loan. Go over all the promisary notes, etc. Talk to your lawyer if you have to. I have to imagine that any lending institution that advertises a loan as a "student loan" would have registered it as such to protect themselves for just such a case, but I don't know the details of your loan.

2) If you confirm that it was truly a student loan and you are ready and willing to continue making payments, call the lender immediately and find out what they're planning to do with your account and try to arrange something with them. I can assure you they don't actually expect you to pay $16,0000 upfront.

3) If you confirm that it was truly a student loan but you are absolutely sure you are not yet in a position to pay on it, you can wait for your lender to make a move. What's probably happening is they're selling off the debt to a third party. You'll eventually hear from them and you can be a stick in the mud by refuting the debt and demanding proof they have a right to collect on it (do this in writing - never talk to them by phone). If you're a big enough pain in the neck the debt will probably get passed around a few times and you can get yourself some time.

**Your eventual goal here is to get to a point where whoever owns the debt is willing to negotiate and you can make arrangements that work for you - such as keeping the debt from ever reappearing on your credit report (or deleting it if it already has)**.  What you DON'T want is to get sued and taken to court, because a judge will rule against you - no matter what it said on your credit report, the law is the law and bankruptcy does NOT protect you from student loans, even private ones.

Good luck, it's a frustrating situation especially since I'm sure you filed BK to make your debt situation less complicated, not more. Just don't let anyone scare you and fight to get a solution that's manageable for you.

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