Student Loan Charge Off - Bankruptcy[ Edited ]
09-30-2012 10:51 AM - edited 09-30-2012 10:58 AM
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.