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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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In bankruptcy court, would a guaranty agency be allowed to

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In bankruptcy court, would a guaranty agency be allowed to respond to an adversary complaint in lieu of the student loan lender? I have filed an adversary complaint for undue hardship against the lender. The lender is past due to respond; however, the attorney for the guaranty agency appeared at court and told the judge that it would be entering by way of a motion to dismiss the adversary procedding based on its presumption that the reopened bankrtupcy is too old. I will be opposing the motion, hwoever, I am curious as to whether the guaranty agency, which provided an assignment of rights dated after the adversary complaint was filed along with a declaration of lost/destroyed promissory note, has any standing in the first place.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 7 years ago.
Hello,

The guarantor of his student loan would have standing to oppose the adversary proceeding. The guarantor is liable for the debt in the event of nonpayment.
Ellen and other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.
I understand that the guaranty agency would step in for the lender in the event of nonpayment. I am wondering whether they have standing, however, if the lender has lost the promissory note. Also, the loan was not in default at the time I filed the adversary proceeding. I realize these are technicalities that the judge probably won't buy, but I am interested in my rights given that I have been asking for my contract for two years, and was never presented with the declaration of lost promissory note until after I filed the adversary proceeding. In fact, their failure to provide me with the contract prompted the whole litigation. I tried to refinance the loan back in 2007 but was told that my loan was ineligible. I asked why. No one could explain. I then asked for my contract. Meanwhile, the loan continued to accrue interest at the rate of 9%. My dispute therefore revolves around the failure to provide me with the contract, and to date they still have not produced the terms of the contract. Can I argue that the guaranty agency has no standing in this event?
Expert:  Ellen replied 7 years ago.
Hello,

Regardless of whether the loan was in default at the time the adversary was filed, the guarantee agency would still have standing to oppose the adversary. The issue of the adversary is to determine the dischargeability of the underlying debt. The guarantor would be an interested party to this determination.

The validity of the loan itself is an issue for the court. In this respect you can challenge the validity of the debt due to the lack of the promissory note.
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