QUESTION
If the student loan is not in default, why is the court paying on them?
Asked on Feb 11th, 2013 on Bankruptcy - Delaware
More details to this question:
I co-signed my son’s student loan. My husband and I filed bankruptcy a couple of years later, and the loans were listed on the bankruptcy, which I understand why they were listed but if they are not in default since my son is still in school, why is the court paying on them?
7 ANSWERS
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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I doubt the court is paying these loans. You need to talk to your bankruptcy attorney.
Answered on Feb 14th, 2013 at 6:39 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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Student loans are due as soon as you take them out...they just defer them before you graduate. This is in your favor...it is paying down a debt you cant discharge. The alternative is they use the money to pay other unsecured creditors.
Answered on Feb 13th, 2013 at 7:16 PM
Assuming you are in a chapter 13, I would need to see the plan to understand what is going on. They must have filed a claim and are now taking a share of the plan payment. From your standpoint, it doesn't really matter unless your plan is a 100% plan. If it is, you should contact your attorney to see if he can do anything. If he can your plan may complete more swiftly.
Answered on Feb 13th, 2013 at 2:46 PM
If you went into Chapter 13 Bankruptcy, it was up to you to propose a plan that provided for payment of your debts. The Bankruptcy Court is paying the debts according to the terms of the Plan you proposed and was confirmed by the Court. If you didn't want the student loan paid through the Bankruptcy, you should have objected to the Claim when the student loan company filed it.
Answered on Feb 12th, 2013 at 3:30 PM
Talk to the trustee about the payments. From what you have said, payments are not yet due. I assume you filed a chapter 13 and that the loan payments might were included in the plan. If so, you should consider amending the plan. If they were not included in the plan, they should not be paid.
Answered on Feb 12th, 2013 at 3:29 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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Your attorney must have put them in your plan or if you did it yourself, you must have put it in the plan.
Answered on Feb 12th, 2013 at 3:29 PM
Bankruptcy Attorney serving Grand Rapids, MI
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David Andersen & Associates, PC
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If you file a Chapter 13 bankruptcy the court will pay on any unsecured creditors who file proof of claims. Proof of claims are what a creditor files indicating they are owed money. Student loans are unsecured creditors so they fall within this group. This benefits you because money is going towards debts you will not be able to discharge in the bankruptcy such as student loans.
Answered on Feb 12th, 2013 at 3:29 PM