My question involves bankruptcy in the state of: Michigan
In 2005 my daughter of 15, a non qualified student for higher education, received a Psyc diagnosis and recommendation to attend a Therapeutic boarding school. There is one Key Bk Achiever loan to pay for 2 of the Non Title IV boarding Schools that are Licensed Mental Health Therapeutic camps and one Prepgate loan, for a $13k - 21 day wilderness boot camp.
I filed a Chapter 7 that was closed over 1 year ago. The School loans were listed on Schedule F for unsecured, non-priority creditor.
National Collegiate Trust (loan administrator) sent me a letter requesting me to make payments on the loans after the forbearance period ended. When I called the administrator of the trust, they said the loan was guarantor backed and automatically collectible even if listed as discharged.
Later, a 3rd party collector sent letters and called daily. 13 mths after closing of Chap7, I sent them all a letter and copy of discharge with instructions to stop trying to collect as its illegal and the debt is discharged. They stopped and then sent a letter offering a settlement for reduced balance.
Where do I stand? No one has appealed the discharge. Is it not necessary for the student loan company to have to appeal in this case, and the debt simply stays alive?
The other loan provider has sent anything since 2009, but I am worried, if the debt is not discharged that I will have deal with them later as well,
If so then Ill go further here.
There is a number of Articles lately by Lawyers on the web talking about discharging student debt based on
523(a) Exceptions to discharge
...
(8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for
A) i an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or
ii an obligation to repay funds received as an educational benefit, scholarship, or stipend; or
B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;
the loan was not incurred to pay “qualified education expenses” and the loan was not for attendance at an “eligible education institution” because the school was not accredited under Title IV of the Higher Education Act. All these are requirements imposed by section 221(d) of the Internal Revenue Code. Does failure of a private student loan to meet any of these criteria means that the loan is fully dischargeable, because it would not qualify under section 523(a)(8) of the bankruptcy law? Also being 15, she was not a qualified student.
Now things sound great here but my key fear here is how do the words "OR" play in here?
The Big Question ??
Does 8b elaborate, to pick up on any educational benefits left out of A i & ii but also lay out those requirements to everything in A and B?
Or is this open to the judges interpretation? I cant seem to find anything with my particular set of circumstances anywhere or a lawyer locally that has the answers.
Does this factor anywhere? With the purpose of these schools, and this situation being primarily medical and doctor recommended, and not of the nature of a student abusing the system by gaining educational benefit, then that student filing to discharge the debt and then using that ed benefit to gains employment and a high paying job. This 23 year old is not currently function healthy in society.
Based on these facts, how should I move forward?
My Att. said the only way to move forward, was with a 5k retainer and pursue the undue hardship as there was ed benefit and I had to pass on that until I get things sorted out.
Thanks for the time if your still with me.
Please feel free to PM me.
BKMI

