I was told several times throughout my BK that my private student loan would be discharged and now I am stuck with a collection agency trying to collect this debt. What can I do? Am I able to get my money back from them or so other type of compenstaion because I thought I was having a clean slate to re-build my credit and now I already have a ding on my credit.
Assuming your lawyer actually told you your student loan would be discharged (which would be surprising because it would imply complete ignorance of a major section of the bankruptcy code), you still haven't been harmed because student loans are not dischargeable without a showing that repayment would create an undue hardship. That is, even if you got bad advice, the end result is the same. Hence, I do not think you have the right to get any money back.
I doubt that your lawyer told you a student loan would be discharged. The law does not allow it, so if he actually misspoke the law, he was wrong. You are not in any different position than if you had been told the right law. After a bankruptcy, anyone owing a student loan will still owe it. So, regardless of what you might have heard him say, you still owe the student loan.
You likely already have several BIG DINGS on your credit if you needed to file bankruptcy.
Assuming a different scenario: If your only debts were the student loan and maybe 2 thousand to some other creditors, then yes, that lawyer may have to give back what you paid since the ratio of dischargeable debt to the fees he likely charged would not be objectively reasonable. If he only charged you $200 for $2000 discharged then 10 to 1 is not so bad and the attorney would be free and clear.
Another scenario would be if you are on Social Security disability or some other thing where you are unable to work, and the purpose of the case was to discharge the student loans with an Adversary Proceeding inside the bankruptcy case, and no Adversary Proceeding was filed, then yes, that attorney has a problem. You can only get rid of student loans in an Adversary Proceeding where you put up evidence, the loans don't just go away.
If the second scenario is true, maybe just maybe the bankruptcy judge would allow you to reopen the case and file that Adversary Proceeding.
Finally, my clients hear what they want to hear all the time so look at your contract if you have one with that attorney and see what it says about non-dischargeable debts or whether Adversary Proceedings were included in his fee. I don't file Adversary Proceedings as part of my regular fee so maybe the attorney was not paid the extra to file that proceeding?
Student Loan discharge requires (via In Re Bruner)
1. a damaging inability to pay (hardhip economics / survival problems) beyond a MINIMUM standard of living
2. Likely to never catch up (persistant state)
3. An attempt at payment
If you have this, and are/were willng to do an adversary proceeding you might be able to do it.
An adversary proceeding can cost $10k
Further, a real question arises on what you paid your attorney.
Most judges in the Central District of California, don't want to see big attorney fees accompanying a request to discharge student loans.
So, its almost an attorney+(semi-probono/cheap) move, coupled with POWERFUL FACTS on inability to maintain a MINIMUM standard of living UNLESS the debt is discharged.
Education lenders typically vigorously oppose discharge of these debts because the configuration of this rule is much in their favor.
Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.