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Can non-school certified private student loans be discharged in bankruptcy?
Wiki User
∙ 14y ago
Under regular circumstances..No. However there are "hardship discharges" for instance someone has student loans, and becomes disabled. That person can file for dismissal of the loans on the grounds that they cannot at the time nor in the future be able to pay them off.
Discharging student loans in bankruptcy is difficult and expensive. It is difficult because the hardship standard the debtor has to show is a tough standard (in Indiana at least), and it's expensive because the debtor normally has to file an Adversary Proceeding (lawsuit) in the Bankruptcy Court during the Bankruptcy Case to get rid of student loans, which costs extra attorneys fees. It is a risky proposition because a debtor may spend all of the money necessary to do the lawsuit, and then lose anyway because they can't show that the student loan creates a big enough hardship on the debtor for the court to discharge the student loan.
However, not all student loans are non-dischargeable, only those which are an "educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend" are protected in bankruptcy. Any student loan NOT falling into these criteria ARE dischargable in bankruptcy (though of course most student loans DO fall into these criteria).
If you're interested, here is the Bankruptcy Code section which says what student loans are not automatically discharged and the criteria one needs to prove to get them discharged:
11 U.S.C. 523(a)(8): "A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt- for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor's dependents."
Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
Wiki User
∙ 8y ago
Wiki User
∙ 18y agoIt depends upon the type of bankruptcy whether federal or state. In most cases they can be included in the BK but, in certain applicable cases the lender can have the stay lifted and the loan debt excluded from BK.
Wiki User
∙ 14y agoThe use of the loan isn't the thing...and normally if you got a loan to use for education/student, and didn't use it as agreed and sworn to in the loan agreement, you could well have other problems....like criminal fraud. If the loan is governemt insured or guaranteed, it cannot be dismissed in BK.
Wiki User
∙ 13y agoyes, with the exception of a student loan (although its possible, the standard is so tough that most attorneys simply state they are not dischargeable). Also, if the lender was a secured lender, the loan will be discharged but NOT the lien.
Wiki User
∙ 14y agoI heard they can be discharged if one can show that the money was used for expenses not related to school. Can anyone provide evidence of this?
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Can you include a private school balance in bankruptcy?
Yes, a private school balance can be included in bankruptcy. Depending on the type of bankruptcy filed (Chapter 7 or Chapter 13), the debt may be discharged or restructured as part of the bankruptcy process. It's important to consult with a bankruptcy attorney for guidance specific to your situation.
If you filed bankruptcy before October 17 2005 could private student loans be discharged?
That would depend on whether or not it was insured by a non-profit.
Would bankruptcy eliminate a private student loan for over 100000?
It is possible that a portion of the loans would be discharged in bankruptcy, perhaps all, but that is difficult to assess without all pertinent information. However new bankruptcy reform will become law as of Oct. 17, 2005, which will not allow any student loans to be discharged, with the exception of a valid "undue hardship" defense.
Can you file bankruptcy on a Incarceration bill and escape having to pay?
Don't understand the phrase "incarceration bill," but if it has anything to do with something owed to the government, no, you can't. Debts owed to the government are not discharged during bankruptcy, only private debts.
When you file chapter 7 bankruptcy and have a private student loan is it discharged with everything else?
In most cases no. They follow you for life. There are some very limited hardship forgiveness provisions. Getting run over by an uninsured bus and ending up paralyzed might qualify you. But if he bus was insured they will wait and collect from any settlement.
In a 1997 bankruptcy was your private student loan discharged if it was not a federal loan but a private loan from a lender?
Depends on how long the loan had been in repayment, whether or not it was insured by a non-profit. Please note that most federal loans are issued by private banks and INSURED by the government.
How can I find out who purchased my student loans after bankruptcy?
This makes no sense. Sorry. Student loans are not discharged by bankruptcy, and unless the loans are private, they are not sold to other lenders. Typically, loans return to the Loan Service Center of the Department of Education, and are administrated by the Department of Treasury.
Can a federal pension be affected by bankruptcy?
Federal or private...NO
Can you file bankruptcy if you have a private loan that's not in your name?
yes
Is it possible to have a student loan from a private lender discharged?
If you are referring to bankruptcy, filed after 10/17/2005, the answer is probably no. The new law makes ANY loan for educational benefit non-dischargeable unless you can 'pass' a VERY stringent test for proving undue hardship.
Can i add a student loan in a filing for bankrutpcy?
In the U.S., you can include a student loan in a bankruptcy and try to get it approved for economic hardship, but it rarely works. Federal and private student loans are not eligible to be discharged in bankruptcy and are rarely allowed by judges.If you need help consolidating your default student loans and get a low monthly payment or 3 years of no payment, call Default Management Services. You can Google them. Ask for Doug.
Once the bankruptcy has been discharged how do you get the creditors that you filed bankruptcy on to show as satisfied or closed on your credit record?
First, get your discharged letter from the bankruptcy court and send it to the credit agencies. No matter what you have put in your bankruptcy, it will not come off your credit report until the bankruptcy is taking off. Make sure you keep all your bankruptcy records that list all items. Soon as I was discharged from my Chapter 13 the very next day my credit score went up very high. Anyone claiming they can remove or change the accurate history of your past should be considered a scam artist. As all conumer affairs and agencies keep on trying to make everyine aware of. YOU can improve your future, but the past is and will remain what it is . Bankruptcy, on a credit report will remain for at least 10 years. In fact, credit reports are provided by indepndent, private companies that are paid to report things they can find. Most requests follow a standard format which ask for it as above. However if someone requests a history for a longer time, they are happy to do so, for a fee. Your BK as a Federal court record, is available and on record for an almost perpetual period of time. No one (except the BK court and judge) can have that history changed or expunged. Period.
