Student loans and chapter 7

[Anonymous]

I have two student loans with ECMC that were in default. I entered into a rehab plan to make $5.00 per month for 9 mos. ECMC took from my debit card a payment for April and May. I filed Chapter 7 bankruptcy April 29. June 5 ECMC reported major delinquincy to my Equifax. ECMC attorney tries to tell me that Equifax reported this. Equifax says that they report what ECMC tells them too. Then ECMC closed out my account in Equifax and opened it current in Transunion obviously trying to cover up their act.

Is my rehab plan still in motion or is it ended or in forbearance?

Can ECMC report a major delinquency if automatic stay? Does this apply if in a rehab plan?

Can ECMC switch credit bureau's if automatic stay?

Is any of this violation? I want ECMC back on Equifax because i had zero debt on transunion until ECMC transferred.

--- I filed adversary hearing June 19 to discharge student loans. ECMC attorney says I cannot speak to ECMC, but she won't answer my questions to status of my loan. Can I legally not talk to them? My loans are now with Transitional Guaranty Agency, which when I call says Welcome to ECMC. Confused yet? Me too. Any help appreciated.

[Anonymous]

I am not sure if I can answer all your questions but let me try.

The only way student loans can be discharged through BK is if you are a 100% disabled and can no longer work at all.  It is very rare that student loans are discharged through BK.  Congress in its infinite wisdom decided to make it almost impossible to discharge any student loans through BK and even if you are successful, most likely the amount discharged will be counted as income and the IRS will come calling wanting the taxes on the discharged income.

While in BK your loans will show that they are in BK but once the BK is discharged they will revert back to whatever status they were prior to BK. 

Unfortunately, creditors can report any debt or any debt status to any and all credit reporting agencies at anytime.  If there are errors you can dispute them and have them either showing correct information or removed if the creditor does not answer the challenge in a certain time frame.

If you can get your loans back to good standing, then there can be more options open to you. 

If you are not sure who or what the status of your student loans are, you can check with the Department of Education about your student loans.  They should have some info about them.

[Anonymous]

Hello, thank you. There is an automatic stay in place even for student loans during Chapter 7. I would presume this applies to reporting a major delinquency to credit bureau's. Esp when there was no major delinquency. Upon filing Chapter 7 the federal loans in rehab plan should be in forbearance?

[Anonymous]

You need to apply for either forbearance or deferment.  It is rarely automatic, the lein holder will indicate your loans are going through BK but whatever status your loans were in prior to BK, will revert to that status once the BK is discharged.  In the rare event the judge allows your student loans to be discharged they should show that.

It will take about 30-60 days for your credit reports to update after BK discharge.

If you are in rehab of your loans, I don't think the lein holder will let you go into forbearance or deferment.  Once you have finished your rehab then those options should be available, first you must show to the leinholder you can make on time payments and get your account current.

For me when I had to rehab my loans, I had to make 6 monthly ontime payments before my account was in good standing again and I was able to defer payments as needed.

[Anonymous]

This isn't exactly what you were asking, but while in BK, your student loan lender/servicer can't solicit you for payments, but you can definitely keep making payments. I would think those payments would still count toward your rehab, but you might want to check with your lender/servicer.

[Anonymous]

---

@Anonymous wrote:

I am not sure if I can answer all your questions but let me try.

The only way student loans can be discharged through BK is if you are a 100% disabled and can no longer work at all.  It is very rare that student loans are discharged through BK.  Congress in its infinite wisdom decided to make it almost impossible to discharge any student loans through BK and even if you are successful, most likely the amount discharged will be counted as income and the IRS will come calling wanting the taxes on the discharged income.

While in BK your loans will show that they are in BK but once the BK is discharged they will revert back to whatever status they were prior to BK. 

Unfortunately, creditors can report any debt or any debt status to any and all credit reporting agencies at anytime.  If there are errors you can dispute them and have them either showing correct information or removed if the creditor does not answer the challenge in a certain time frame.

If you can get your loans back to good standing, then there can be more options open to you. 

If you are not sure who or what the status of your student loans are, you can check with the Department of Education about your student loans.  They should have some info about them.

---

Student loans are almost the equivalent of taxes! You'll pay them till you're dead. Sorry, I have no advice here but I will be back to look at more comments. Thank you for posting.

[StartinOver]

You do not have to prove that you can never again work. You have to pprove undue hardship, if you are in most districts. I believe there are 2 that don't use the Bruenner test.

http://www.studentloanborrowerassistance.org/bankruptcy/

[Anonymous]

I had issues with ECMC as well.  I didnt know at the time, that ECMC chose NOT to participate in being repaid through by BR 13 but it wasnt 4 weeks post-discharge that they put that collection on my account.  I still couldnt believe they didnt just agree to get paid through BR instead of waiting 4 long years to get their money?  Odd. 

Anyway, one of the reporting bureus was still showing it as LATE/not paid  until recently.  I called ECMC to have them confirm everything and told them that one of the bureaus had it open so they faxed them a EUD (or AUD).  I was disputing it, and called to rush it because I am in the beginning stages of mortgage for a new house.

Anyway it updated over the weekend!!  and is now OFF my credit report!