From: Hunt Compton (hcompto@linfield.edu)
Date: Sun Oct 21 2001 - 16:54:40 EDT
Judy:
I am not an attorney. However, it is my understanding that any new debt
created *after* the filing for relief under Chapter 7 is *not" part of the
bankruptcy. You are free to bill and collect the new debt. I would stay
within your school policy for collection of the new debt. Do not use
"bankruptcy" as a reason to stray from your policy. You might contact
financial aid to have them review to see if filing for bankruptcy changed
the financial status of the student thus changing the amount of the award.
Hunt
--On Wednesday, October 17, 2001 5:38 PM -0400 Judy Ralph
<JRalph@otterbein.edu> wrote:
>I've never run across this particular scenerio and perhaps some of you
>have, so I'm asking for your collective wisdom and advice. I just
>received a Chapter 7 filing on a currently enrolled student. She is a
>full-time, traditional age student (21 yrs. old), and for the past two
>years, has been considered independent for financial aid purposes. This
>was the result of an appeal to the Special Circumstances Committee,
>which granted her an override to her dependency.
>
>Our students register for the entire academic year in the Spring term of
>the prior year. (We are quarter based.) This student has a small
>balance due for this quarter, less than $400, which is primarily books
>charged to her account. I know that while this Chapter 7 is in
>progress, I cannot bill her or make any attempt to collect this current
>balance due until she receives a discharge. Since tuition debts are
>non-dischargeable, at the discharge, I can start the processes to bill
>and collect this amount now due.
>
>Here's the real issue: since she is enrolled for future terms, can I
>legally bill her for those terms, and if not, can I cancel her future
>registrations? Or would the Bankruptcy Court see that as an effort to
>collect the prior debt? Along the same lines, can I cancel her abilty
>to charge her books to her student account? Realistically, it could
>take 6 months for the discharge to happen and that would mean that she
>could remain here through all of 2001-02 if I cannot cancel her
>registrations.
>
>I thought I'd ask all of you bankruptcy gurus for your opinions before I
>ask a rather expensive attorney specializing in bankruptcy for an
>official opinion.
>
>Thanks in advance,
>Judy Ralph
>Student Accounts Manager
>Otterbein College
Hunt M. Compton Phone 503-434-2455
Staff Accountant Fax 503-434-2630
Linfield College email hcompto@linfield.edu
900 SE Baker WWW: http://www.linfield.edu/accounting/index.html
McMinnville, OR 97128
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