What was the cut off date to file a student loan on a bankruptcy?

Answer 1

Filing bankruptcy on Federally guaranteed Student Loans will not help you 99% of the time. Consolidate the delinquent or defaulted loans instead at www.defaultms.com . A student loan can be discharged in bankruptcy through an adversary proceeding in which you must prove repayment would cause "undue hardship" to you and your dependents. The burden of proof is entirely on you, and the vast majority of debtors who file for bankruptcy under either chapter have no chance whatsoever of winning.

The financial interest of the taxpayers will be very firmly represented, and if you do win in lower court and your situation is anything but completely hopeless, you can definitely expect multiple appeals. Those who can afford to hire an attorney for this kind of extensive litigation can afford to pay their student loans, so the small number of debtors that do succeed are almost always acting pro-se.

Federal law does not specificallydefine undue hardship, so the courts are free to evaluate each case individually and determine undue hardship as they see fit. The most common method is a 3-prong test established in Brunner vs New York. Under this method the debtor must prove: 1) That their current situation would not allow them to both maintain a minimal standard of living and repay all or part of their debt, and 2) That this situation is not likely to change in the near future (the debtors past is often examined in great detail here), and 3) That the debtor has made a real, true, good-faith effort to repay their debt. This is where they get most abuse attempts, since student loans can be far more flexible then most other debts in assisting those that are willing but unable to make normal payments. If you have made anything less then an honest and real attempt to pay you will get nothing short of public humiliation from the other side on this last prong.

Student loans is governmentally funded or subsidized cannot be dismissed in a BK. There are provisions in federal student loans for "hardship dismissals" however. That usually concerns someone who has become disabled and can never expect to earn enough income to repay the debt. The only way a Federal student loan can be discharged is if the borrower becomes perminantly disabled or dies. Other than that, there are special programs like those for teachers that can partially discharge a loan. Actually, you can bankrupt your studnet loans� it is just very difficult. Now there is a book that tells the step-by-step procedure for filing and arguing an adversary procedure to have your loans discharged through a Chapter 7 bankruptcy. The book is entitled, "Bankrupt Your Student Loans and Other Discharge Strategies," by Chuck Stewart, Ph.D. (ISBN 0-9764154-5-3).