12-26-2012 09:02 PM
My wife filed bankruptcy in May 2007.
She had a student loan prior to that for $35K from AES / KeyBank (I am not clear on the specific relationship between the two entities or their specific relationship to the loan).
I am not clear if the loan was a private or gov't guaranteed loan.
She does not believe the loan was discharged in the bankruptcy.
SUMMER OF 2009.
She did not service the loan for some time, but did contact AES / KeyBank prior to joining th military in summer of 2009 and notified them of that, placing the loan in military deferment.
FALL OF 2012
In fall of 2012, they contacted her to pursue repayment. My wife's optimistic plan had been to ignore the loan and have it become "abandoned." This did not work.
She deployed shortly after and using a general POA, I took over dealing w/ KeyBank. They offered a settlement of $10K, lump sum. We paid this, via wire transfer, and they sent a letter acknowledging receipt.
The contract offered read: "KeyBank has agreed to accept $10,000 as Settlement in Full for the above referenced loan(s). Once the certified funds are received and applied to your account(s), the loan(s) will be reported as settled to the Credit Bureaus. Please be advised that you may receive a 1099 tax form at the end of this tax year, as you may be responsible for paying taxes on the difference of the current payoff amount and the settlement amount."
The settlement letter we received read: "This letter confirms that the above Key Bank account was settled in full on November 7th, 2012 with your final payment of $10,000.00. All appropriate credit reporting agencies have been notified accordingly. We suggest you retain this letter for your own records."
To be upfront, I don't care about her credit score. She told me about the bankruptcy before we married, she's super responsible now if not always actively engaged w/ her finances, and my score is 768. But I do have concerns that we still have financial liability, to either another lender or the government. Any guidance on the following would rock:
1) Her credit report now reads (for the entry I BELIEVE is this loan): "Claim filed with government for insured portion of balance on loan." It also shows closed in May 2008, with no activity thereafter, and lists the loan under "Potentially negative information." Based on this entry, and the information above - is there any reason to believe that we still owe $25K to the government as repayment for a loan guarantee paid to AES / KeyBank?
2) If this is not the entry (the account number is different, but AES is different from KeyBank, and the date of May 2008 makes me nervous - but there's nothing else in her credit report even remotely similar to this loan), is it possible that KeyBank collected the full $35K (or some other amount) from the government, which discharged the loan, and then they received an additional $10K from us that we were not legally required to pay?
3) How can I find out if I owe money related to this loan to another lender, the government, or anyone else?
Some research of KeyBank suggests predatory if not actually illegal practices. Still, my wife took the loan and I believe in paying our debts, although if they are willing to offer a settlement, I'll take it. If it now turns out I was scammed, lesson learned and I'll address it going forward.
But I don't want to get a call from some other lender in three years looking for $25K, and I don't want to get a collection notice from the IRS years from now looking for money either. I just want this done. Any guidance to that effect would rock.