Legal Question in Credit and Debt Law in New York

Trying to Settle NY Student Loans

I am a Boston-area attorney. I am looking for a NY attorney experienced dealing with the NYSHESC (Albany) on behalf of debtors. I have a client debtor (MA resident), who is trying to work out a reasonable settlement.

Student Loans were in repayment starting 1986, client filed Ch 7 in 1995, pursuant to 7-year rule that then applied, all student loans should have been discharged.

Problem is subject creditor argues that loans were consolidated in 1991, that started a new 7 year period, thus subject loan not discharged. Client is very upset that if he had done the wrong thing (just stopped paying loans then), he probably would have been all right after the bankruptcy, but because he tried to do the right thing (consolidating), they are trying to penalize him by denying him the fresh start bankruptcy is supposed to provide.

Clients are willing to pay a reasonable lump sum amount (altho grudgingly, still think bankruptcy should have wiped the slate completely clean), problem is creditor has tacked on all interest, fees, one-time collection cost of more than $4000 (on a debt that was only $13K at time of consolidation, total is now 2x that).

Thank you.

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