Legal Question in Consumer Law in District of Columbia
Funds Awarded Mistakenly
As a student I got school loans, the Loan Co sent the money to the school which deducted school expenses and gave me the balance for personal use for 2 sems. I graduated in May with no hold on my acct. In Nov 2005 i received a 1147 bill from the school. I asked for an explanation and i was told that their computer mistakenly awarded me extra money in the spring sem. I used the money and had no idea that it was extra as i was not aware of how much had been released by the Loan Co. I relied on the sch to deduct its expenses and give me the balance. I am jobless and have no way of paying this money right now as i have the school loans and they waited 6 mths after grad. I used the funds innocently and fill like its not my fault that they screwed up. The School is threatening to send my bill to a collection agency do i have any legal ground not to pay the money? Thanks
2 Answers from Attorneys
Re: Funds Awarded Mistakenly
No, you do not.
Re: Funds Awarded Mistakenly
You're responsible for making sure the amount you receive is correct. I don't imagine you would be as willing to let it go if they had underpaid you by $1147, would you?
You can consult a DC attorney, but I don't know of any law or regulation that will allow you to not pay back the overpayment. If you let them sue you, you will wind up paying attorney's fees and costs and probably having the lawsuit appear on you credit history. The court will order a payment of some amount, and the judgment and execution will stay on your record for as long as DC law allows (usually 10 years renewable for 10 years, or for 20 years), and on your credit report for years after that.
Try to work out a small monthly payment plan you can make, to be reconsidered when you get a job. After all, our President says everyone who wants a job has one, the economy is booming!
Making the payments on time will help your credit standing when you apply for an apartment or a car loan, or even a mortgage.
The chances are the loan is not dischargeable in bankruptcy, but you might have other debt you can discharge through bankruptcy, making it easier to pay the student loan. If you are unemployed, you will qualify for Chapter 7 (unless you are collecting high unemployment) and now can get the filing fee waived.
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