STudent Loans In The Bank
I just recieved my student loan from the school, and rather coincidentally had a proccess server come sniffing around. Now, here's the question-- next week I was going to school to speak to the legal clinic for a BK 7. A few questions I would like to ask you are: Can student loans be frozen? The documents I signed for them stated that they could only be used for legitimate school expenses, and detailed many horrible penalities for misuse :). In other words, does the money count as "mine" or federal money that I'm being allowed to use. I know, for example, that a creditor couldn't force you to max out a credit card to pay him off-- what about student loans. Second: In the worst case, where they manage to get some of my student loans, would the court allow me to return them to the federal government? There's a procedure at school where you can repay those loans if your expenses during the year are less than you expected, and would that apply? Finally, what if I just go and yank all the money out of the bank?
Answer:
I'm not an expert on student loans (except that I know how to get them discharged in bankruptcy), and the answers to your questions likely depends on the language of the loan agreement. I'd suggest checking out the SallieMae site; it may have some helpful information. Do I understand you to say that you know how to get student loans discharged in a Chapter 7? I had heard this was virtually impossible.
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