School went bankrupt. Do I still have to payback loan?

Question

Nearly 17 yrs ago, I attended some bogus business school for about 3 weeks. I did, unfortunately sing a promisory note for a loan for 2500 dollars. I was 17. I wasn't learning anything so I went back to a counselor and stated I wanted to withdraw and asked if there was anything I needed to do. She said just return the books and she would handle everything else. Well about a year or so later I started receiving letters I owed money. Mistakenely, I ignored them for about 2 months and then tried to call the school and was left on hold alot. Finally, went down to the school and saw a group of other "ex- and current students" waiting outside and they were angry! Come to find out the school "closed up shop" and filed bankruptcy! Months dragged on and I didnt know what to do and when I called Citibank, they said, allthough unfortunate, I signed a promisory not and STILL owed the money. I was like (to myself), "Look, I'm 17-18 and don't have a job! What are they going to do? Arrest me?!" So i just went on about my business! Ignoring letters, I started working and when I awaited my tax refund check, I received an "interception" letter and they confiscated my check!!! That's when I realized how serious it was. I sent letters then to the loan people and they suggested that I just consolidate it, which I did and they paid the bank but then I owed THEM I think it was like 7 or 9,000 dollars because they covered the loan which by that time was in default!! So at first I made timely payments for several months and then went back and forth between payments and deferrments for years! The stupid loan is now like 15, 000 dollars and is in deferrment. This arrangement has always allowed me to collect my tax refunds for years but it's just hanging over my head. I'm waiting to pay off the remaining 2, 500 on my car so I can take the 218/month car note and transfer that to paying MONTHLY toward the stupid student loan. My fiance thinks that I am just re-paying on a college loan( because I did wind up going back to college FOR REAL and earn my Bachelor's degree back in CUNY(of NY) and he just thinks I took out one or two loans so the amount to him doesn;t seem bad if that's all I took out during 3-4 years of college! But I don't want this over OUR heads! Is there ANY way to lower this? I mean either RID of it or REALLY lower it ? Please Advise!! Thanks!!!!

Answer 1

Who is the loan company (the people who are chasing you for the payments) Is it Citibank or an outside collection agency? Please give the name of the agency and I can give you more info. By making the payments, you've acknowledged the debt. Were you, by chance, under 18 when you entered into the loan? If so, you can dispute it.

Answer 2

The first thing you need to do is call the bank holding the loan and tell them you cannot afford to keep paying if it continues to accrue interest. If they will stop charging interest on the balance you will pay the loan. That should be possible and manageable. If they do not cooperate file for bankruptcy. Your credit is already messed up but talk honestly with fiance first because if buying a house in the next 7 years is in the plans, bankruptcy might not be the best way to go.

Answer 3

Yes you will have to pay it back! Just because it went under doesn't mean they lose EVERYTHING. The school or where ever you got the loan from has what is called a note which is your account or file etc. When a company goes under they sell their notes to other companies to turn over some money or capital. Then once your note has been sold to "joe blow" they send a letter saying that you now make your checks out to them. I hope this helps.

Answer 4

If you were 17 that note is not legal as you were not 18 ide go to a solicitor about this and 17 years is way to late for them to collect money from you

Answer 5

You owe the money to a financial institution, not the school. The school going bankrupt has nothing to do with your debts.

Answer 6

I don't know for sure, but I do know that when a store goes bankrupt (such as Nobody Beats the Wiz)-they don't have to pay YOU BACK-in my case I had a $30 store credit and they went bankrupt so I got screwed, so it should work the other way around too, if your school went bankrupt, why should you have to pay? I mean, they are NOT going to pay what they owe out so why should they still get anything coming in right?

Oh, and I noticed you saying your fiance doesn't know about your debt, a WORD TO THE WISE, I'm not sure if you know this already but when you marry him, he will also bne responsible for YOUR DEBT, your creditors have the right to go after him for YOUR DEBT, even if it was accrued before you were married. HOWEVER, you can make sure this DOES NOT HAPPEN, and anyone who is getting married SHOULD ALWAYS DO THIS to PROTECT THEMSELVES (but many people just don't know about this law). The way for him to protect himself from anyone coming after him for your previous debts (and you should do the same because he may be hiding debt from you as well), is to take out a few ads in some newspapers. I am not sure how many you have to take out but I believe it is probably at least 3 or 4 major newspapers that you have to place the ad in. The ad would say something to the effect of "I "John Doe" "including address" am not responsible for the debts of others". It is basically as simple as that, but you should research it online to find out exactly how many papers to place the ad in and exactly how to word it, I know the name and address MUST be included and if you lived in NY, you would place the ads in the New York Times, Newsday, Post, etc. If you open up a paper right now and look in the back where they have classifieds and legal notices I am sure you will see many ads just like this that you have never noticed before (they are always VERY SMALL and overlooked). After placing the ads, buy a copy of each paper and save for your records. One day if a creditor tries to come after you or he for any of your previous debt before marriage, they will not be allowed to because you covered your butt by placing this ad (this does not apply to any debt you accure after being maried).

I took some law classes in college and that is how I know this to be true, I just don't remember the EXACT specifics, but I have told all my friends & family & it actually came in handy once when a friend of mine married a guy who had a HUGE DEBT and they did try to coem after her for the money but she had her newspaper clippings and als he had to tell was send them copies and they never came after her again.

Oh, and as the person responded, if your debt is to a bank or financial institution, then you will most definitely have to repay it, they paid the school already and you owe them, NOT the school, I wasn't thinking clearly at first. Now, if the school closed down before you got to finish completing the education that you paid for, then you would probably have a case to fight, but unless your debt is to the school directly, which I doubt it is, then you will owe whoever lent you the money to go to school (I am assuming you got the education you paid for (or the bank paid for) so you really don't have a valid complaint if the school went bankrupt AFTER you used up what you paid for, right?) Well, good luck either way.

There should also be a statute of limitations-not on student loans from the governement, but for example-of you owe money to a credit card company, they couldm't get it from you 17 yrs. later, so I don't know how this works with the company you signed an agreement with, but I think if you had just ignoredit back then and not continued to pay and sign new agreements, they wouldn't have been able to do anything now, but every time you follow up on this, sign a new agreement or make a payment, you are extendingt he time they have to collect this loan, which was probably only 7 years or so to begin with, before it would have just been wiped clear off your credit history (especially since you were SO YOUNG).

Answer 7

the financial institute approved the loan,not the school