Those Who Filed Bankruptcy : Did You Do A Settlement For Your Loans?
Posted by Aggravating_Storm493@reddit | studentloandefaulters | View on Reddit | 11 comments
I’ve seen a lot of posts/comments on this sub about people who went the bankruptcy route and weren’t able to get their student loans discharged. Some went the settlement route and some are waiting out the SOL.
Was wondering if people who went the bankruptcy route could share how their settlement process went and what it entailed for them
My very long story as short as possible is :
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I declared bankruptcy, did an adversary proceeding, got my federal and private loans discharged
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timing of my private loan discharge was right as Discover sold the loans to Firstmark, so my Discover loans are all discharged according to the courts. But Firstmark doesn’t care
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My lawyer says the judgement paperwork includes Firstmark and is trying to get them to acknowledge paperwork. She says not to worry, the loan isn’t my problem and she’s planning to file sanctions since Firstmark shouldn’t be contacting me (they’re also contacting my co-signer)
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my co-signer is on the hook all the same while I deal with Firstmark claiming this loan is back for me and my co-signer
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** I read an example of someone who went through bankruptcy being able to get a good settlement offer with their loan servicer due to the servicer realizing they probably wouldn’t get much money. And it was this example that made me make this post. Because I am wondering if I should just settle the loan under my name as I am post bankruptcy in an effort to get a low enough offer since my lawyer says they technically shouldn’t be coming after me. Because if I can get my co-signer off the hook if I am the one to do the settlement via a 1099-C, especially if I can get the lower amount, then maybe I should do it?**
I want to get my co-signer out of this. And if I, the one who did bankruptcy, can get a better 1099-c settlement, then I will do it. I just want to get as good of a deal as possible and since I did bankruptcy, I wonder if that would help me get the better deal like that example I read. Or if my co-signer should be the one doing negotiations for a better deal?
Any advice / opinion / comments / personal stories on this would be much appreciated! And if I can help anyone else, let me know, I’ll do my best.
HauntingGap4593@reddit
Bankruptcy removed your obligation. If you had a co-signer, they are still on the hook for it.
You are correct they can’t contact you about the debt, but they can most certainly contact your co-signer.
Aggravating_Storm493@reddit (OP)
Hey there! Thanks for the response. Are you sure about the bankruptcy removing obligation? I ask because a number of other people on the sub ended up settling their loans post bankruptcy, so then why would they go that route? Truthfully I have no idea, I’ve been trying to research this point but I can’t find info on it.
And yeah :/ my co-signer is on the hook, that’s why I want to get a settlement done for them. The guilt I have over my co-signer being stuck with this is debilitating. I wish I never put them in this position.
HauntingGap4593@reddit
You said in your post that you filed your adversary proceeding and had them dismissed. If your students loans were dismissed, then they are dismissed… for you.
Any co-signer would still have the obligation.
Most people don’t and can’t get student loans dismissed through bankruptcy. So afterwards they still have them, and they default and settle them.
Aggravating_Storm493@reddit (OP)
Yes! Sorry about that. For me, the loans are dismissed even though Firstmark is trying to make a stink with me. My lawyer is working on that.
But that’s why I was thinking - and maybe it a stupid idea, that’s why I made my post - that if I try to negotiate with Firstmark, when I don’t have an obligation to them, I’d be able to get a decent settlement because they’d just get 0 off me? Or should I just have the negotiations on the side of my co-signer?
I admit that probably sounds dumb. I’m in a panic and trying to find the best course of action, so that’s why I’m wondering if my idea is a good or bad idea.
Sorry about my confusion with your other comment, I thought you wrote it about bankruptcies in general, my brain is all fucked with the stress so I read your comment wrong.
mdacosta92@reddit
It's not a dumb idea at all! If you can negotiate a settlement with Firstmark, it might help your co-signer by reducing their obligation. Just make sure you get everything in writing and clarify that your bankruptcy discharged your liability. It sounds like your lawyer is on top of it, so maybe run your negotiation plan by them too!
Aggravating_Storm493@reddit (OP)
Thanks for the comment!! I’m going to call on Monday. Because if there’s anything I can do to lessen this for my co-signer, I will do it. It’s not fair to them and while I’m in the clear, I want to help them get in the clear.
My lawyer doesn’t deal with negotiations so that’s why I’ve been writing / commenting on this sub - she actually said she recommends mt co-signer just do nothing and let it default / they’re old and don’t really have assets so they wouldn’t be able to come for my co-signer etc.
But my co-signer is someone who really feels badly about not paying back a loan he cosigned with me, so I don’t want to put them in that position of waiting out SOL. That idea was making them feel like a bad person, even as my lawyer and myself were trying to tell him that’s not true.
So for my co-signers sake, I just want to end this as soon as possible and if me negotiating might get a lower possible deal, I’ll do it even though my liability was discharged.
Anyway, thanks again! And this community is awesome, I’ve gotten so much bell from people like you so I really truly appreciate the kindness.
OverallRip7179@reddit
i cash advanced my $1200 fee for chapter 7 with 2 credit cards. ha! it got rid of all my debt except student loans. also gave me 4 months to break a lease if i wanted to without being sued. good shit.
Aggravating_Storm493@reddit (OP)
Thanks for the response, I really appreciate it!!
What is your plan for the student loan debt, waiting it out to SOL or something like a settlement?
And if you don’t mind me asking this - how’s your life been since bankruptcy?
I feel like I’ll never get out of this severe anxiety and I’m just hoping that others have gotten to a better place for themselves even if they still have the loans hanging around.
HauntingGap4593@reddit
You could probably negotiate, and while you are right they would get zero from you- that isn’t the case for your co-signer who they could potentially sue and get more.
Plus, depending on when it is settled out, your co-signer might get hit with a tax bill for the difference.
I’d talk to your lawyer about options, and save like hell to either give to co-signer to settle so it’s nothing out of their pocket and then make agreement with them for difference or some other agreement the two of you made.
Aggravating_Storm493@reddit (OP)
I want to tell you how much I’ve appreciated your comments and help on my post!! I’m absolutely saving for a settlement for my co-signer, and I’m hoping I can get them out of this mess sooner rather than later by having a decent lump sum available.
That’s why we aren’t waiting for SOL to run out. I don’t want to put my co-signer who I love dearly in any further strain. They’ve been a champ, I’m the one panicking while they’re just like “oh whatever it’ll work out in the end, nothing to worry about” - I wish I could have that attitude but alas, here I am panicking on Reddit.
HauntingGap4593@reddit
You said in your post that you filed your adversary proceeding and had them dismissed. If your students loans were dismissed, then they are dismissed… for you.
Any co-signer would still have the obligation.
Most people don’t and can’t get student loans dismissed through bankruptcy. So afterwards they still have them, and they default and settle them.