School demanding payment on my student loan. I never got a student loan.

[Papaya]

What is the name of your state?Nevada

OK, this is related to a thread I started earlier this week.

I got a letter a couple of weeks ago (actually the same day I filed for bankruptcy) from a bad vo-tech school that I had dropped out of demanding payment on a student loan. I had never signed a loan agreement.

Today, I got photocopies of my paperwork from the school, including my enrollment form. The form states that if I dropped out of the school, I still would be liable for payment of my student loan. Here's the kicker- there is language on the form explicitly stating that I understand that the school was not promising me any financial assistance, and another clause on the back that stated that the agreement was not a promise that I would receive a loan from the bank that they work with.

In other words, they're trying to claim my tuition was a loan.

What is the liklihood of the school successfully getting their shot on? Is this something I should report to the trustee? Is it a pretty safe assumption that the school tuition can be discharged?

 

[AttorneyOney]

What can happen is that the school might sue you long after your bankruptcy case is closed and claim that your "loan" was of the kind that can't be discharged under section 523(a)(8). Based on what you said, it was not a loan and wasn't guaranteed by a government agency even if it was a loan. Furthermore, you may have a defense against their claim even without the bankruptcy based on wrongdoing by the school. I suggest taking the problem to your attorney. The case may seem so clear that he'll advise doing nothing and then counterclaiming like mad if they ever do sue you. He might advise instead filing an adversary complaint for a declaratory judgment that the debt can be discharged. Or he may have still other advice.

 

[Papaya]

Actually, I don't have an attorney. I'm not working at preset (hope to be starting a new job soon), so I went to a paralegal service.

Anyway, the school has an arrangement with a private bank, there is no government agency involved. And I never signed a loan agreement with the bank.

At any rate, the school is not accredited. One of the instructors had told me verbally that the school was accredited, and I found out a few months after I quit that the school had lost its accreditation. When exactly this occurred, I don't know, but I completed my education at a community college.

I was, in fact, treated very badly by the instructors and administration, but I never documented any of the incidents or made a formal protest. I had this idea that I would play along with them until I got my diploma.

I've discussed the situation with my mother, and she thinks I should take the certificate from the school I graduated from to the hearing with me. She seems to feel that if I can prove I finished my education at another school, it would work in my favor.

Is she right?