Does a school have to let a student graduate if tuition is included in a Chapter 13 re-payment plan?

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Does a school have to let a student graduate if tuition is included in a Chapter 13 re-payment plan?

My husband and I are about to file Chapter 13. He attended barber college for 1 year and 1 week before he would be finished, he was forced to stop until the balance of $6000 was paid. This amount will be included in our repayment plan. Is the school obligated to let him finish the schooling and obtain his license once the bankruptcy is filed? Or would he have to wait until the end of the plan (5 years)? As a side note, the original quoted obligation was $600 and after he spent a year there and they had received over $4000 from Pell Grants, they upped tuition to $6000.

Asked on April 19, 2011 under Bankruptcy Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The problem is that while filing bankruptcy can prevent collection action agains someone for an existing debt, it does not necessarily obligate businesses or people to provide goods or services going forward without being paid for them. Therefore, it is likely that the school will be precluded from pursuing him for the $6,000, but it may not be required to allow him to go to any more classes, fulfill his requirements, get a diploma, or attend graduation. It may certainly be possible to negotiate with them that they will do this; it is also possible that the bankruptcy court would order them to allow him to finish--much will depend upon, I suspect, whether his graduation is just a "formality" (he's fulfilled all requirements already) or whether the school has to provide additional classes or services. It is worthwhile bringing up in bankruptcy, but be prepared that if your husband needs any additional classes or must fulfill any new requirements, it may be the case that the school does not need to provide these things without being paid.


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