5.0   Bankruptcy

5.1     SRBS will manage all bankruptcy petitions, proof of claims and non-discharge correspondence on behalf of Purdue University campuses for all Non-Student, Student and Student Loan Accounts Receivable.

5.2     Upon initial bankruptcy notification, whether verbal or in writing, all collection activity will cease per the automatic stay provision required by bankruptcy regulations. If the debtor does not provide evidence of a bankruptcy filing, and if the University cannot verify the existence of a bankruptcy filing or discharge by researching court records, normal collection activity will resume.

5.3     With regard to Accounts Receivable for which a student is the debtor, upon initial verification of a valid bankruptcy petition or later discharge of qualified debts, the respective student Hold will be released. 

5.4     As contained in 11 U.S.C. Sec. 523 (a) (8)of the United States Bankruptcy Code, certain Student Accounts Receivable defined as an educational benefit overpayment or loan made may be exempt from discharge. The following types of Accounts Receivable will be considered as non-discharged debt.

5.4 a.       Student loan obligations including Perkins, Health Professions, Institutional, Emergency and other University student loans evidenced by a signed promissory note.

5.4 b.      Obligation created under a signed Installment Payment Plan agreement that meets the criteria of a student loan.

5.4 c.       Obligation created by the return of Title IV educational benefit over-payment.

5.5     Upon receipt of the final determination of the bankruptcy petition from the United States Bankruptcy Court, one of the following will occur:

5.5 a.       The debt will be discharged, which prohibits any collection of the debt from the debtor, the discharged debt will be written off and any applicable Hold in the case of a student debtor will remain off the student’s record, or

5.5 b.      In the case of a dismissal or a discharge that includes non-dischargeable student debt, the debt will be reinstated on the account and collection efforts, including reinstatement of any applicable Hold, will resume.

 

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