In 2009, my wife and I filed for bankruptcy due to an over-extended loss of work. We were unable to pay our bills and filed for Chap. 13. We had $35K of private consildated student loan debt. We were aware that this was required to pay back. We contacted Sallie Mae and informed them of our situation, and they agreed with no sign of problems. Immediately after our Bankruptcy was finalized, we were contacted by Sallie Mae informing us that they were sending us to collections without notice. We attempted to stop this, but they refused. They sent us to a Collections agency "acting on behalf of Sallie Mae". We set up a payment plan with them have been paying them monthly since. I had my credit run for the forst time in over a year and a CHARGE OFF is shown from Sallie Mae...which basically means we are in default. If we are paying them, how we are we in a state of CHARGE OFF? This is where I am confused and need help:
1) If we are already defaulted, what is the point of paying anyone back? What benefit is there?
2) I read numerous posts saying DO NOT default on an SM loan...are we screwed for life? Does this ever come off of your credit?
3) What are the alternatives in this case?
Bankruptcy is supposed to allow a fresh start, but because of this, we seem to be tainted for a long time. Will we ever have good credit again?
I meant to put chapter 7...not 13.