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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2668
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I filed in 2011 and included in the filing my private

Customer Question

I filed for bankruptcy in 2011 and included in the filing my private student loans that I had taken out for my son's education. This was with Sallie Mae, Tuition Answer Loans. One, for $10,000 which was in my name but Casey (my son) was included as to who the loan was for. Then Casey took out a loan for $6000 which was in his name but I co-signed the loan. After filing I received a letter where they stated: Bankruptcy doesn't always discharge student loans, and because your loans shown below wasn't discharged, you remain responsible. On the bottom of the sheet they listed my student loans but the $10,000 loan was absent. I assumed it was discharged - that's what the letter indicated. Then my son filed in 2015 and we assumed the various Tuition Answer loans he had (including the $6000 loan that I co-signed) would also be discharged. Then I received a bill for the $6000 loan. When I called Navient they told me that these loans can't be discharged. She said when I filed those two loans were transferred to Casey and then when he filed, those two loans were transferred back to me. I asked if I filed again, would the loans then be transferred back to Casey and she said yes. When I read the letter I had from them about the $10000 loan she put me on hold and then someone else came on the phone to explain that it was an error on their part and that I still owed the debt. I have looked everywhere online about bankruptcy laws regarding private student loans, not backed by the government, that are sent directly to the client and can be used for anything - like food, shelter, etc. which is what these loans were for. So, now Navient lawyers want to talk to me. Do I have any ground to stand on? Is the law squarely on their side?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  DrakeLAW replied 1 year ago.

Hello and welcome to JustAnswer, my name is ***** ***** I am an attorney. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. This question and response may be viewed by other parties as noted in JA’s terms of service. By continuing, you confirm that you understand and agree to these terms. By continuing, you confirm that you understand and agree to these terms.

Please give me a moment.

Expert:  DrakeLAW replied 1 year ago.

First of all, for the loan to even be dischargeble, it must qualify as a non-dischargeable student loan under this statutory criteria:

(1) it must have been made under a government or nonprofit student loan program, or (2) it must be a qualified educational loan under section 221(d)(1) of the Internal Revenue Code, for attending an eligible education institution as defined in section 221(d)(2) of the Internal Revenue Code, and incurred for costs of attendance as defined in section 472 of the Higher Education Act.

Second, you are correct, if the loan was not actually used for a qualified higher education expense, such as the ones you listed, it is likely dischargeable.

I would say you have a pretty solid leg to stand on. Only thing is, to prove it you need to file an adversary proceeding in your bankruptcy to declare that debt discharged. But perhaps if you talk to them about these points they will settle and go away. Does that answer your question?