[ch1p5tack]

My mother cosigned on a couple private student loans that I took out in college. I was paying the loans and one day when I went to submit my payments I was advised that a different company is now servicing my loans because of my co-signers bankruptcy (which I was not aware of.) The new company was United Garuntee. I contacted them and they told me that I didnt have to pay on these loans at this point because they are in a "claim" status now because of the bankruptcy (that my co-signer filed for.) I did not understand this and I continued to pay them 200$ a month for a 6 months. Every time I contacted them I had to let them know how much I was paying. I would ask when my next payment is due and they would reply there is no due date. At this point I stopped paying.

A couple of weeks ago my mothers bankruptcy was finalized and out of no where these loans popped up at a collection agency and they are telling me my loans are in default because I havent been paying. They want the whole amount or a large downpayment followed up with a payment plan.

United Garuntee has never asked me for money on these loans. So how can they be defaulted.
I have tried multiple times to set up a payment plan to pay like I was before all of this went down but apperently this is not an option.

I dont understand how my loans can go into a claim status because of something my cosigner did. This all seams sureal and I dont know what do. At this point I dont have a minumum of 5k to give them and I am trying to buy a house.

If my cosigner never filed for bankruptcy I would still be paying citibank (the original lender) and all would be ok. There was never any hardship or anything on my part.

What can I do?

[scolls]

They can't legally ask you for payment if there is a pending bankruptcy. Since it is with a collection agency, you can start by doing a verification of debt or basically making them prove you owe them money. I suggest going to creditboards.com and asking over there.

[ch1p5tack]

Thank you. My cosigners bankruptcy is not pending any more and that is why I am being contacted.

Why did the cosigners bankruptcy effect my loan when I was paying on it on time and in full at that point?

How is it fair to tell me I dont have to make my payments, never be contacted, and then out of no where request the entire amount of the loan to be payed?

[mostie]

I know that regular student loans are not covered under bankruptcy, personal student loans, not so sure. Seems surprising that they would tell you not to pay because of the bankruptcy, then suddenly after the bankruptcy is done, it goes into collections. If they are able to be counted under a bankruptcy, then it would seem that the co-signer didn't add them in with the rest of the bills, orrrrrrr, they aren't counted because they are student loans. Strange that being a co-signer on student loans would have anything to do with a bankruptcy, since it isn't your bankruptcy and it wasn't in default. Gotta love red tape!

If that were me, I think I would contact the credit agency, send them a copy of the bankruptcy (if the loans were even on there), and see if they will forgive the loans- or, if you were sending in payments, send copies of the cancelled checks to Citibank and see what you can do there to show that you were never in default on the payments. Either way, it's going to be a pain in the butt.

[mostie]

....as an added thought, what happened to the $1200 you sent them over the six month period? Is it even showing up?

[scolls]

They cannot tell you to pay because telling yo to pay when there is an active bankruptcy would be considered an attempt to collect the debt. That's a big no-no.

[jlawrence01]

Originally Posted by scolls

They cannot tell you to pay because telling yo to pay when there is an active bankruptcy would be considered an attempt to collect the debt. That's a big no-no.

Why not? The OP is not filing for bankruptcy, the cosigner is.

It really doesn't matter as the student loans are non-dischargable under the US Bankruptcy Code.

[mostie]

Originally Posted by scolls

They cannot tell you to pay because telling yo to pay when there is an active bankruptcy would be considered an attempt to collect the debt. That's a big no-no.

I think it would only be considered a debt if the bank loans were on the bankruptcy- I just can't figure out the idea that the person who declared bankruptcy was a co-signer on a loan, the loan was not in default, and the only way that a co-signer would have to pay on the loan and have it considered to be theirs would be if it were in default. Plus....I can't recall reading in the previous posts (and I'm much too lazy to scroll around, it is Friday, after all!) if it was just a straight bank loan, or an actual student loan through the bank.

Years ago, I used to work for a CH 7 Trustee, combed through all of the schedules, and I know that if a debt is not added in, it isn't even counted. But the laws for CH 7 have changed so much since I worked there, that there's just no telling anymore. I even heard that they are not allowing utility bills to be added in on a bankruptcy anymore, wow. Interesting.

[Kristin Marie]

Are the loans private, or actual student loans?

Why were the loans listed within your mothers bankruptcy? She would have had to itemized all accounts that she was planning on including within her bankruptcy. If you were not in default with your loans, she never would have been asked to resume responsibility of payment. She never should have listed the loan in the first place if she wasn't responsible for payment?

[johnwilliam083]

Loans for students can be easily approved, very less paper work have to do. Bankruptcy chances increased, if students not pay for it.