Financial Advice

Is It Really Possible My Tuition Answer Student Loans Were Discharged in Bankruptcy?

Question:

Dear Steve,

I have 3 Tuition Answer loans through Sallie Mae that I was talked into while attending Concorde Career College in Kansas City in 2005. I owe over $66,000 just to Sallie Mae (not mention my federal loans). It’s odd because I was the student but my partner had to co-sign. SHE is listed as the borrower…..isn’t that odd? I was the student. I pay more than half of my salary to student loans and may be laid off in the next few weeks. If so, I may default. I filed for bankruptcy in 2009 but of course my lawyer didn’t touch my student loans.

I’m wondering if these student loans were given to me under false pretenses. These loans weren’t towards my education, the money was given directly to me. I used the money to live off of while going to school full time. Do you know a bankruptcy lawyer in the Kansas City area that could help me? I need relief in the worst way!

Heather

Answer:

Dear Heather,

Wow, those are really problematic loans that certainly are up for a possible discharge for a number of reasons.

I also ran your situation past attorney Austin Smith who has done a lot of research in this area. Here is what he said.

“Regardless of any potential false pretenses, it’s very likely that your Tuition Answer loans are dischargeable, and thus were discharged in your bankruptcy in 2009. However, it’s impossible to say for certain without reviewing your total federal loan borrowing history and your “Cost of Attendance” at Concorde. Also understand that because you have a co-signor (or co-borrower as it seems), she will remain liable on the loans despite any discharge for you. I’d be happy to look at your documents if you want to reach out to me directly.”

Austin alludes to the issues surrounding these loans. While so many people continue to insist private student loans are not dischargeable in bankruptcy, that’s just not true.

From what you shared it sounds very likely the loans you have might not be able to be validated, were used for expenses outside of protection, and might have actually been discharged in your original bankruptcy. If so, you could be eligible if they attempted to collect on the loans or ask you for payment afterwards.

I think you should read this and this.

You should take Austin Smith up on his offer to help as a first step. After you talk to him, come back and post an update for me in the comments below and we can take it from there.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

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