Disbursement Cancellation and MPN Requirements for Bankruptcy Petitions

    When a borrower petitions for Chapter 13 bankruptcy Utah Higher Education Assistance Authority (UHEAA) cancels any remaining loan disbursements.  To ensure clear understanding of what constitutes a pre-petition debt, on or after October 1, 2003, pending disbursements will be canceled when any type of bankruptcy filing notice is received.

    In addition to canceling pending disbursements, UHEAA will continue to request that schools immediately return any disbursement not delivered to the borrower.  Lenders and borrowers will be notified of the cancellation, and borrowers advised to contact the school should they wish to reapply for the loan.

    Although there will be no change in current procedures, schools may see a few more disbursement cancellations and requests to certify a new loan.  Borrowers who wish to reapply will be required to complete and sign a new Federal Stafford Master Promissory Note, Application and Promissory Note for Federal PLUS Loan or the new Federal PLUS Loan Application and Master Promissory Note, as appropriate.

    Any questions related to this Bulletin should be directed to UHEAA Policy and Training at (801) 321-7166, or by e-mail to mjohnson@utahsbr.edu.