A flight school I attended went bankrupt and I was unable to finish my education. My loans had alreasy went through, am I liable for the balance?
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A flight school I attended went bankrupt and I was unable to finish my education. My loans had alreasy went through, am I liable for the balance?
Now I am trying to buy a house and this student loan is in litigation and is showing deferred on my credit report but is enabling me from obtaining a morgage.
Asked on June 17, 2009 under Bankruptcy Law, Florida
Answers:
N. K., Member, Iowa and Illinois Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
You may qualify for a discharge of the loan if the school closed while you were enrolled or if you withdrew 90 days before the school's closure, and you were unable to complete the program due to the school's closure.
You need to fill out a closed school cancellation form to apply. The form is available on the Department of Education's website: http://www.ed.gov/offices/OSFAP/DCS/forms/form.discharge.school.closure.pdf.
If the discharge is granted, you are no longer obligated to repay the loan or any other charges/costs associated with the loan. Any amount that you paid on the loan must be reimbursed to you. Furthermore, the loan holder must help clean up your credit record.
If the discharge is denied, you may appeal to federal court.
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