Expert: Mark J. Markus- California Bankruptcy Attorney - 2/13/2009

Question
QUESTION: Student Loan in 1988 then in 1992 filed chapter 13 and paid the loan off. Now they want to collect for interest. I was told they could not do this as we paid. I am getting credit collection agency's call me. What can I do?

ANSWER: The student loan creditor is entitled to interest since it was likely a nondischargeable debt (unless you met the time limitation criteria on the date your case was filed).

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QUESTION: Can I fill bankrupsy on the interest?. I do have the funds to pay this off. And the continual hounding has caused me to be sick with worry!!!! Do you think a letter from a Lawyer to them help to dismiss this?

ANSWER: No, interest on a non-dischargeable debt is also non-dischargeable.  You can file a Chapter 13 case, but you'd need to repay 100% over the 60 month plan.

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QUESTION: We received a letter from the bankruptcy court saying we paid in full. Interest also satisfied..


Answer
I would need to analyze the plan that you filed, the confirmation order, and the discharge order as well as other documents to fully evaluate this.  I suspect that what the bankruptcy court "letter" said is that you completed all your plan payments, but unless your plan payments included paying the student loans 100% plus the contract rate of interest, then there may have been accrued interest that didn't get paid.   My suggestion is that you have a bankruptcy attorney in your area take a look at all the relevant documents in your court file to see exactly what's going on.