Expert: Mark J. Markus- California Bankruptcy Attorney - 7/7/2008

Question
My husband filed bankruptcy in July 2005 and was discharged in November 2005.  We thought the Sallie May private signature student loan had been discharged but they are now suing us. Because we filed before the law changed in October of 2005 the loan should have been discharged.  We need to file an answer to this law suit and, in order to do that, we need to know what the exact law was at that time so that we can quote it in our answer.  Our lawyer has been less than helpful and has left for vacation for the entire month of July with no one (or so they say) to handle his cases while he is gone.  I have only 2 weeks left to file our answer. Please help?  What was the law we need to quote in our answer?

Thank you.  

Answer
There is no "exact law" that will provide you the answer.  It depends on the following:

For cases filed PRIOR TO October 17, 2005, if the PROGRAM under which your student loan is issued, insured, administered is a FOR-profit, PRIVATE (non-government) entity, it may be dischargeable. However, if the program itself, such as LAL, GSL, etc. receives nonprofit funding by participation of nonprofit entities, the loan is not dischargeable in bankruptcy.

The problem here is determining whether the PROGRAM under which your Sallie Mae loan was administered, was for-profit or private.  That is something you may need to find out in Discovery through your pending lawsuit.  

I recommend that you hire an attorney to prepare and file the answer for you.