New Member
Posts: 2
Registered: ‎09-30-2012
Student Loan Charge Off - Bankruptcy
[ Edited ]

I filed for Bankrupcy in Feb, 2012.  For all intents and purposes, the process went pretty well.  I had a fresh start, and things look good for the future.


I hold two Student Loans, one through Direct Loans, another through Citibank (private student loan  - recently transferred to Discover).  I took out the Citibank loan in 2001 and had approximately $5,200 remaining.  The Direct Loans was a Parent Loan for my daughter, at about $46,000.  These were included in the petition.


Knowing that Student Loans cannot be forgiven in Ch 7, I continued to pay both loans - both of which were never were past due.  Payments were sent electronically (on-time), to both lenders through my bank.  Payments continue to go to both lenders.


There appears to be no issues with the Direct Loan, I am receiving statements from them and payments are being applied.


However, on the Citibank loan, my last statement was recieved in February.  Despite not seeing any statements, I continued to pay my regular amounts - it had been set up that way for years through my bank.


In May, soon after discharge, I started receiving collection letters from a Collection Agency stating that the full $5,200 was due.  They were particularly agressive, calling me at work - despite requesting them to stop, threatening wage garnishment.  When I asked why the loan was charged off, they said it was in the contract - they could call the loan if a BK was filed.  When I asked why I was not contacted about this prior to charge-off, they said they were not allowed to call due to the BK.  I received absolutely no correspondence from Citibank prior to this.


During this time, I continued to make payments to Citibank.  The loan would be current if the collection company were not involved.  The collection agency is now threatening Legal Action unless I pay in full.  


I continue to make payments to Citibank, and have never been late.  They are cashing the checks, however, I have no way of knowing where that money is going.  The calls and letters continue from the collection agency.


Why was Citibank able to charge-off a loan that was not past due?  I feel backed into a corner, I just cleared my debts - and now another huge one is looming?  To me, this does not seem legal.  What ( if any ) recourse do I have?


Long story...looking for help.