Legal Question in Bankruptcy in California

Student Loan Interest in Chapter 13 Bankrupcy

I filed Chapter 13 bankrupcy in 11/1998 solely to stop the interest on my student loan. I paid my payment plan in full, 2 1/2 years early. Now six months after the discharge, I have received a notice saying I still owe more money for interest and collection charges for my student loan. I never once received any collection letters during the time of my payment plan. Can they charge interest for my student loan that was in my chapter 13 bankrupcy that was filed in 1998? What was the law then? Did it change to allow interest to be charged on student loans? If so, when did it change? Please HELP me. Thank you for your response in advance. HL


Asked on 4/15/02, 11:33 pm

2 Answers from Attorneys
Mark Markus Law Office of Mark J. Markus

Re: Student Loan Interest in Chapter 13 Bankrupcy

Interest does not stop on student loans. It may be deferred during the Ch. 13 plan, but it doesn't stop because it is not a dischargeable debt. If your plan was a 100% plan, you may have an argument, but I'm not totally sure; I still think they would be entitled to interest accrual.

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Answered on 4/15/02, 11:39 pm
Victor Hobbs Victor E. Hobbs

Re: Student Loan Interest in Chapter 13 Bankrupcy

When I last researched student loans they were dischargeable. However, the lender had seven years in which they could attempt to collect the loan. This was stayed if the debt was put in some sort of deferred status. After seven years they could be discharged in a chapter 7. So it may be that if you filed your thirteen before the seven years are up the interest will accrue. I believe the issue of the interest accruing during your Chapter 13 is worth researching.

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Answered on 4/16/02, 10:25 am


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