The Facts
A former client contacted me recently in an effort to obtain an official transcript for her daughter’s first year of high school at a private school. The facts of the case are undisputed. The debtor filed a chapter 7 bankruptcy in 2010. Later that year, the debtor’s daughter attended her first year at the private high school. The daughter later transferred to a public school and is graduating now. The public high school wants to obtain the official transcripts from the debtor’s daughters first year at the private school. The debtor owes that private school $3800. The private school is withholding the transcripts until receipt of funds. The real issue here is whether or not the private school can withhold those transcripts under these circumstances. The answer may surprise you.
Debt Is Post-Petition
Since the debtor’s daughter attended her first year at the private school after the debtor had already file for chapter 7 bankruptcy, the entire debt owed to the private school is post-petition and non-dischargeable. Thus, if the debtor wants to obtain the transcripts for her daughter, she will have to satisfy the outstanding debt to that private school. The private school is not violating a discharge injunction because the debt was incurred after the debtor’s bankruptcy case under chapter 7 was filed. The debtor does have an option.
Chapter 13 Option
The debtor can file a chapter 13 bankruptcy case and repay the debt owed to the private school over a period of 60 months. Upon the filing of the chapter 13 bankruptcy case, the private school will be forced to turn over the official transcripts to the debtor. The debtor needs these official transcripts so that her daughter can graduate from the public school and obtain entrance into Illinois State University. Should the private school continue to withhold the transcripts, I will be able to bring a motion to compel the private school to turn over the transcripts. I may even be able to have the court hold the private school in contempt if they fail to do so. This would technically be a violation of the automatic stay and the withholding of the transcripts can be construed as an attempt to collect a debt. If the court finds a violation of the automatic stay, then the debtor can be entitled to monetary sanctions which can include attorney’s fees and a fine. I personally believe that once the chapter 13 bankruptcy case is filed, the private school will voluntarily turn over the transcripts to the debtor.
Debtor Keeps Transcripts If Case Dismisses
If the debtor fails to make timely payments to the chapter 13 trustee, then the case will be dismissed either on motion of the trustee or a creditor. However, the transcripts will have already been submitted to the high school and the debtor will be able to forward those transcripts so that her daughter can attend Illinois State University. So the benefits of the debtor far outweigh any of the rights of the creditor. If the debtor fails the chapter 13 case, the debtor still obtains the desirable transcript. If the private school withholds the transcript, they can be sanctioned. Now the decision to file a chapter 13 is not one that should be made lightly. Perhaps the debtor can find another way to pay the private school without having to resort to chapter 13 bankruptcy. However, bankruptcy law is federal law and it is there for a very good reason. Under these circumstances, the debtor will be able to obtain her daughter’s transcripts, her daughter will attend the Illinois State University and the debtor will be given an opportunity to repay the debt over an extended period of time.
Contact My Office
If you or someone you know finds yourself in a situation where you owe money and you are not able to obtain your property, contact an experienced, bankruptcy attorney to assist you. You might find that not only is the law on your side in these situations, but you will have the breathing room to make an affordable repayment plan to your creditors. I have offices located in Chicago, Wheeling, Waukegan, Aurora, Westchester and Joliet. We are open Monday through Saturday. The direct office number is 847-520-8100.
