Bankruptcy & Loan Modifications

Oregon Bankruptcy Lawyer, Karen Oakes, wrote a very interesting article recently detailing the illegal activity of some student loan collection agencies. She points out that when a debtor files a chapter 7 or 13 bankruptcy, the automatic stay not only stops collection of unsecured debt, but also to all debts that the bankruptcy code does not expressly exempt. Student loan debt is NOT one such debt. As such, collection agents, can not attempt to collect student loan payments during the time a consumer bankruptcy is open.

Attorney Oakes writes in her post, “Some student loan debt collectors will either lie to you and tell you that they can continue to collect, or perhaps they are just ignorant of the law. Perhaps the debt collector is willfully ignorant of the law.”

It should be noted that any creditor who intentionally violates the debt protection act and the automatic stay, short of filing for a relief from stay and a judge granting such a motion, is subject to harsh penalties.

If you would like to read her complete article, click here.

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