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Posted in Student Loans
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Question By
sunchild786

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Private student loans went to collection agency after Ch. 13 discharged.
Prior to bankruptcy, right out of college, my loans were current & always on time. While in bankruptcy, my private loans were transferred. The bankruptcy was discharged in June of this year & I've found out that my private loans are being held by a collection agency. I set up a payment plan with them, but they said that they will be holding them indefinitely. Will this show up as a collections account on my credit report even though I'm paying it? We're saving for a house & during our bankruptcy we were able to really turn things around--great jobs, know not to rely on credit, 2 kids & we're ready to buy a house. However, now I'm worried that these loans are going to prevent us from being able to get a mortgage. My husband's private loans were treated the same way our federal ones were, so he doesn't have this problem. I'm really hoping they show up as any other account. Does anyone have any experience with this?

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Have you discussed with the bankruptcy about the private loans being transferred during hte bankruptcy?    If they were held by a creditor that was on your report and they sold them when they were notified of the bankruptcy, they had an obligate to notify the court that they did not own the debt and that they were transferred so that you could have included them as the legal owners.   Something doesn't sound right to me.  If the original debtor failed to work with the court they may have sold a debt they did not have an entitlement to and that debt could in fact not be yours.   Lets assume that everything was legal.   Check the credit report,if they are not listed, they will probably not be listed as long as you are workig with them and making payments.   They aren't collections until they contacted you and you failed to pay the debt. If you caught it right, and you continue to make the payments as agreed, they may never show up on your report.  If you are in a position, consider negotiating with them for a lump sump payment and possible deleting it so the debt never occured.   Then you only have to wait for your bankruptcy to expire from your credit report.

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Reply by
faidros

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Sorry, I did not pay attention that they were Student Loans.  Student Loans are normally not included in a bankruptcy unless it is an extreme hardship.

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