Anyone who has the time to read and understand this well enough to assist; I will GREATLY appreciate any nuggets of wisdom from you!
I petitioned for Chapter 7 Bankruptcy in MI and was recently discharged. Included in my petitoin was a Tuition Debt owed to my alma mauteur. Upon calling to request a copy of my offical transcript in lieu of my newly received discharged, I was sadly informed that this debt was not dischargeable.
Before deducing based on what you may know of the ever complicated,11 U.S.C. S 523(a)(8), I should sum up the history on this.
I registered for classes in 2003-2004 and was awarded:
$2K+ Federal Pell Grants
$1K+ in Perkins Loans
$4K+ in Subsidized Loans
Because I was not a full time student; the tuition was prorated.
I received a letter from my College explaining "Title IV" procedures and how monies not earned by semester credits were returned to the Government entity from which they came; and I would be responsible for any balances. As a result of this; my Perkins loan was adjusted to $800+ from the $1K+ leaving me with a $600+ balance.
Two months later I received a notice from the university stating that I owed a total of $3K+ for 2003-2004 school year! They stated that I owed for monies returned from the Pell Grant ($2K+) & Perkins Loan ($1K+)
I fought the college on this issue for approximately 2 years before having to deal with the collectors that they transferred the debt to (a total of 3 collections agencies in 16 months) The last one made threats of legal proceedings and this along with other financial issues forced me into Bankruptcy.
Now; I read the NSLDS guidelines to Title IV money as well as several court proceedings similar to my circumstance. Here's my findings:
1. Once the college returns the monies to the Govt Agency; the debt then becomes that of the College. This in turn would no longer be considered an Educational Benefit because the governmental obligation was severed and there is no promissory note / loan agreement issued with myself and the school to classify this as a "Loan"
2. The college has listed this on my student records as a Debt Write-Off and not a Loan Write-Off because it has no documentation supporting it as being such
3. Under the Title IV School Code; "Perkins Loans that have already been disbursed cannot be backed off of an account; it can only be deducted off of future Perkins Loans. Federal Pell Grants must be adjusted as well from future installments.
4. The college did not object to the petition and are listed as a discharged creditor.
So now that you have the basics; how should I go about rectifying this matter? I have a Bankruptcy Attorney, but will I need a Litigator to address this?
Anything from Anyone is Appreciated