Legal Question in Business Law in California

Re: Old school loan

Yes, this item of negative credit can be requested to be investigated and verified. If the creditor does not or cannot verify it the credit bureau must remove the item from your credit report. Even if verified you are permitted to give a written statement concerning/explaining the debt. Be aware that there are 3 major credit bureaus that may have different credit information from you and must all be contacted individually.

We have a flat rate for this service for our clients of $399.

You should be aware, however, that just because the creditor (the one who is owed the debt) files bankruptcy, does NOT mean that the debt is not still owed. Additionally, the student loan may have been made by a financial institution that is not the school, thus not even bankrupt.

I would be happy to speak with you.

J. Caleb Donner

805-494-6557

Check my cite for Credit Repair

www.donnerlaw.com

Re: Old school loan

First off, I should note that most student loans come from financial institutions and not from the schools themselves. The financial institution would generally not be affected by any subsequent change in the legal status of the school.

Second, while a bankruptcy proceeding can eliminate the bankrupt's obligations to repay debts it owes, it will have no effect on the bankrupt's rights to collect money others owe to it. If anything, the appointment of a bankruptcy trustee whose job is to help creditors get paid will make it more likely that someone will seek payment from you -- assuming that the funds were lent by the school directly and not by a third party.

You may have a valid defense against the loan, but Federal law gives the lenders on student loans sweeping protections and makes the number of valid defenses much smaller than you might expect.

In most cases, your situation would be like someone who borrowed money from a bank to buy a car and then found that the car had problems. He would have a perfectly reasonable gripe with the car dealer, but the bank would still be entitled to its money.

There are instances -- as when the school uses fraud to certify a student's eligibility for loan funds -- where the lender's rights may be reduced. You should consult with a lawyer to see whether yours is sich a case.