private student loans
Question
How do I handle this student loan situation?
I took out a private student loan to accompany my Stafford loans and scholarships for my undergrad. The loan was for $15,000 and was co-signed by my parents. I was a freshmen when I took out the loan and am in my last semester now. A year ago, my parents filed for Chapter 13 bankruptcy, and things have gotten weird from there. My Stafford loans were left untouched, but my private loan defaulted (apparently because of the bankruptcy?). I of course freaked out, having not been notified that this would affect me like this, and went to a a credit check website to see what damage this had done to my credit report. Now I am thoroughly confused as to what's actually going on. My credit report from all three bureaus shows that account to be "paid as agreed," is in good standing, is not delinquent and posts a $0 balance with a $0 scheduled payment. My other loans show their appropriate balances and scheduled payments. That loan is also listed as a closed account and is not listed in my total debt on my credit summary, but my other loans are correct to the cent. The extra notes from all three bureaus state that a claim was filed with the government for the insured portion of my loan balance and that the loan was sent to recovery. But again, the account is listed as "closed." It also lists that the loan was sold in the same month that my parents filed for the bankruptcy. Could that be affecting things? I have not been notified of anything and wouldn't even know what was happening at all had I not gone digging. I have tried calling the loan company twice to inquire about this matter and have received no response. The loan company has not sent me anything to collect on that loan even though I should start repayment soon (I start repayment on my Stafford loans next month). What is going on here? I know that student loans are not covered under bankruptcy protection, but why is the account listed as closed and with a $0 balance? Is this going to come back to haunt me? In response to the two answers, I have tried on three separate occasions to contact the loan company, First Marblehead. They have ignored my calls and inquiries, not bothering to get back to me. I have printed off my call log from AT&T as proof in case they try to deny it. I don't want to get screwed over here. Also, upon looking more in depth at my Experian report, I saw that this part of my credit history (the loan) is set to be removed in 2015, seven years from when the bankruptcy was filed. What is that about? If my loan was up for the standard repayment period of 10 years, then it wouldn't be finished or removed until at least 2019. Any thoughts? Also, though I am not listed on the bankruptcy, I was a dependent when my parents filed and am currently still a dependent. And at the time the loan was taken out, I could not even get a loan without a co-signer. I am beginning to wonder if they were put on the top line by the bank even though the loan was taken out for me.
4 weeks ago - 2 answers
Best Answer
Chosen by Asker
Alright, first of all, a private student loan is not government backed therefor it IS covered under bankruptcy laws if it is listed on the paperwork. If this was actually a cosigner situation, then the parental units should have had this cleared but you would still be responsible for it. There can, occasionally, be a stipulation in the contract that, if it is listed on a bankruptcy, it clears the balance in full for all concerned but, that is rare. Write a letter to the creditor explaining things as you did here, include all identifying information, & request a determination of the status of your account. If you were not listed on the bankruptcy, you should still be responsible and, if you don't start repayment, it could come back to haunt you. All your other student loans sound like they are government backed & you are right in saying they are not affected by bankruptcy. Definitely write the letter & mail it certified to make sure the company got it & follow up withing 2 weeks of receiving the receipt. I know, it doesn't seem fair that you would have to do all this, they should be, but they will not & it will hurt you a lot more than it would them.
Source(s)
Former debt collector for private student loans in probate situations. FYI, non-government backed loans are NOT paid off when the student or cosigner dies unless they sign a death clause when opening the account. Rarely are these automatically included & you may not be able to even get them these days.
4 weeks ago
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Other Answers
You need to ask the lender these questions......which are all VERY good and valid questions. Unfortunately, anyone here can only give you an educated guess. Call the lender first thing Monday for the status of your loan.
by Ryan M- 4 weeks ago