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Citibank Settlements Are Complete

On November 10, 2008, I announced and highly recommended Citibank’s 100% debt forgiveness offer to my former SSH students in every state except for California. Through my efforts and the efforts of others, this offer was subsequently extended to include my California SSH clients with Citibank loans and all former SSH students throughout the country with Citibank student loans. This offer by Citibank was met with skepticism by some who figured that there must be a catch. In December of 2008, A second settlement letter was issued clarifying the fact that in exchange for an assignment of the client’s proof of claim, Citibank will cancel the debt and not assign its claims to any other company. In addition, Citibank agreed in writing to request that any reference to the Citibank SSH loans be deleted by all credit bureaus to whom the SSH Student Loans were reported. Since then, I have heard back from many of my Citibank clients confirming that the Citibank Student loan has been deleted from their credit reports. Earlier this month, I learned that Citibank has decided not to issue any 1099-C debt settlement income forms as a result of its cancellation of these disputed debts. This is a complete victory for all of my Citibank clients.

A copy of the revised Citibank Settlement letter is set forth herein:

Date

Student Borrower Name
Student Borrower Address

Re: Master Student Loan Promissory Note between you and Citibank, N.A.;
Account Number __________

Dear ________________:

Our records reflect that Citibank, N.A. and The Student Loan Corporation (collectively, “Citibank”) made the above-referenced loan to you for flight training and education at Silver State Helicopter School (the “Student Loan”). As you may know, Silver State filed bankruptcy in Bankruptcy Court in Nevada and ceased operations earlier this year.

Citibank sent funds to Silver State for your flight training tuition. It is our position that you remain obligated to repay those amounts to Citibank under the promissory note you signed. In recognition of the disputed nature of your obligation, Citibank will agree to release you of such obligation and to cancel the debt if you comply with the conditions and terms set forth below.

Specifically, if you assign to Citibank any and all claims you may have with respect to your Silver State loan, whether against Silver State, Citibank, or their present and former officers, directors and employees, Citibank will release you of the debt under the Student Loan. If such release occurs, then Citibank will not seek to transfer or assign the collection rights with respect to the debt of the Student Loan to any third party. The assignment by you of your claims with respect to the Silver State loan will enable Citibank to pursue a claim in the bankruptcy court for return of the money it advanced on your behalf.

If you do not sign and return this letter to us, we will assume that you have not agreed to assign your claims to Citibank, and you may keep and pursue any claims against Silver State in the bankruptcy court and make arrangements with Citibank for a repayment plan, as you will remain obligated for repayment of the Student Loan.

If you agree to assign your claims to Citibank in exchange for the cancellation of your Student Loan, you and any cosigner should review carefully, sign below and return this letter to Citibank at the following address by December 31, 2008:

Citibank South Dakota
Attention Executive Communications
701 E. 60th Street N.
Sioux Falls, SD 57104

If you assign your claims to Citibank, then Citibank will also request that the credit bureaus to whom your Student Loan was reported, if any, delete any reference to the transaction from your credit reporting, although Citibank cannot warrant or guarantee the timing with which such credit bureaus will comply with such request.

Please be advised that the statements herein apply only to the Student Loan and do not in any way modify, amend or otherwise relate to any other accounts you may have with Citibank or its affiliates. If you and any cosigner do not timely sign and return the enclosed assignment, then Citibank reserves all rights and remedies against you under the Student Loan.

If you have any questions or need additional information, please call Mary Bakker at 605-331-7219.

Sincerely yours,

Citibank, N.A. and The Student Loan Corporation

By signing below, the undersigned borrowers agree to assign to Citibank any and all claims we may have with respect to our Student Loan for flight training and education at Silver State Helicopter School, whether against Silver State, Citibank, or their present and former officers, directors and employees. In exchange for this assignment, Citibank (including its predecessors and successors in interest, employees, agents, affiliates and assigns, agrees to release the undersigned borrowers from the Student Loan.

___________________________ ________________________________
Borrower Signature Date

___________________________ _________________________________
Cosigner Signature Date

In February of 2008, Citibank Filed Notices of Assignment of Claim and Pending Order Thereon in the Silver State Helicopters, LLC Bankruptcy Case for the claims that were assigned to it by way of settlement. These Notices read as follows, “YOU ARE HEREBY NOTIFIED an Assignment of Claim has been filed in this case by the Assignor named above. Pursuant to Federal Rule of Bankruptcy Procedure 3001(e), you are hereby notified that unless you file your objection within 20 days following the date of this notice, the following Order will become effective without further action by the Court. Any objection filed must be set for hearing and notice sent to the U.S. Trustee, Trustee, creditors and all parties in Interest.

IT IS ORDERED that Citibank South Dakota, N.A. The Student Loan, Assignee, is hereby substituted for ____________, Assignor, as a claimant against the estate herein, effective on the 21st day hereafter, absent the filing of a timely objection.”

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