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Collection Efforts and Inaccurate Credit Information Following Student Loan Modification or Discharge


Recent studies by the Consumer Financial Protection Bureau estimate that 44 million American hold student loans and that these loans total more than 1.4 TRILLION dollars. Most of these loans are not private loans, but come from federal sources. There is more money owed in student loans than both credit cards and auto loans, says a study from the Brookings Institution. While there are some methods which allow the amounts of those loans to be modified or discharged, many people with student loans are still being harassed with collection letters and calls for inaccurate amounts or amounts that are not owed at all. Others have not received the benefit of the modification or discharge on their credit when they are trying to get a loan for a car or a home. Our firm is currently investigating whether students who have successfully modified their loans or obtained a discharge/loan forgiveness are getting the full benefits of those modifications/discharges.

There are some limited circumstances in which student loans, particularly private loans, can be forgiven completely or discharged or forgiven partially. Some of these circumstances include:

  • You engaged in certain types of public service or were employed in certain occupations (such as a teacher) through the Perkins Loan Program Cancellations.
  • The school closed (such as the recent closing of the Charlotte School of Law).
  • There was a permanent disability discharge or a death of the loan recipient.
  • A bankruptcy court discharged your student loan debt based upon an undue hardship analysis.
  • False certifications by the school regarding your ability to benefit from its training.
  • The school signed your name on the application, promissory note, or electronic funds transfer without your authorization or knowledge.
  • Identity theft
  • If you were certified for your eligibility to receive a student loan but a physical or mental condition, age, criminal record, or some other reason disqualified you completely from employment in the occupation in which you were being trained.
  • You withdrew from school but the school didn’t pay money it owed to the US Department of Education or lender.

Our law firm does not handle obtaining student loan discharges, but we highly recommend reviewing your options at the following sites:

If you are going through the bankruptcy process, you should talk with your bankruptcy attorney about the possibility of discharging your student loan debt based upon the undue hardship exemption.

While we do not handle obtaining discharges, we are currently investigating what happens if you have obtained a successful discharge. We are investigating post-discharge efforts by lenders (such as FedLoan Servicing/PHEAA, Great Lakes, Navient, Nelnet, CornerStone, Great Lakes, HESC, Mohela, and OSLA Servicing) to collect inaccurate amounts or amounts that are not owed.  We are also investigating how those lenders and credit reporting agencies (such as Equifax, Experian, and TransUnion) are inaccurately reporting discharged or modified amounts.

If you have obtained a discharge or modification of your student loans and you are receiving inaccurate collection notices or have inaccurate information on your credit report, our consumer protection team of attorneys can assist at no cost to you.

If you have a second, take a look at our main page and/or our results page to see results from consumer protection matters. While our firm is in Raleigh, we handle cases all over the state. There is no charge to you for our services. We handle these cases on a contingency basis, which means that our firm is only paid if we recover compensation for you. You can email us at info@maginnislaw.com or visit our contact page to schedule a time to speak with one of our lawyers. We look forward to helping you.

If you are interested in other areas of consumer protection law, feel free to sign up for our mailing list or take our consumer rights survey to take a few minutes to see if you are dealing with other cases we are investigating.

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