Q: Ch 13 discharged 6/17. One of student loans was reopened 10/17. Getting calls from another closed one.Can they open now?
One bureau shows closed 0 balance. The other shows 23k. Closed and written off as bad debt. The Bank is calling but not stating why. I have recieved no written correspondence. Can they reopen it this late? Should I call them back?
A:
Congratulations on completing your chapter 13, very few people accomplish what you have achieved. In order to discharge the student loan, you will have to file an adversary in addition to a bankruptcy and prove the student loan is an undue hardship. This is easier said than done. When you file bankruptcy Federal Student Loans are put into forbearance. Once your bankruptcy is dismissed or discharged they are taken out of forbearance. Student loans also continue to accrue interest while you were in bankruptcy so you could owe more on them now than when you started.
If you have Federal student loans and are in default. You can be subject to a wide range of consequences. Including but not limited to administrative wage garnishment, Tax Refund Intercept, Social Security Offset, denial or revocation of security clearance if you are a federal employee, Federal or State licensing can be in jeopardy or a lawsuit.
Before you file your tax return because any refund could be intercepted you should do the following. Confirm what kind of student loan you have, go to the National Student Loan Data System. NSLDS.ed.gov. Select Financial aid review and then accept or decline to use the system. Then log in with your username and login. If you do not have one you can establish one. You should see a complete list of all of your federal student loans. Anything with a yellow triangle and red exclamation point is in default. Once you have confirmed the kind of student loan you have and the status of the loan or loans you can take action to stop garnishment, refund intercept or any of the other consequences.
There are a number of income-based repayment plans that help you get both delinquent loans and defaulted loans current and with a payment, you can afford. In some situations, your payment could be as low as $0.00. You should contact your bankruptcy attorney and if they do not handle student loans you may speak with a student loan attorney. You can search for an attorney using the Justia "Find a Lawyer" link at the top of this page.
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