Debt and Bankruptcy

Will bankruptcy remove your student loans?


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2011-12-20 21:35:54
2011-12-20 21:35:54

I worked for Direct Loans so I know a little about these things. You do have a few options. If your income is very low you could change pay plans to the "Income Contingency Plan. This plan is where you make payment according to your income. The payment can be as low as nothing a month. Usually they have payments of $12 a month. After 26 years the federal Government will forgive the loan and you will not have to pay it.

Other options are deferments. You can stop payments for several reasons. Call Direct Loans for more information. A deferment stops payment and the Gov. will pick up the interest on the subsidized portion of your loan. You can get a forbearance, which will stop payment on your loan, but you will still accumulate interest on all parts of the loan.

I live in WA State. I did a bankruptcy 7 years ago, but was unable to include my student loans. I was told by my attorney that I could have included them if I had paid on them consistently for 5 years prior to the bankruptcy. I had only paid on them for 2 years straight at any one time... between extensions & forbearance's. Like many others, I shall be paying on these damn loans with my Social Security Checks... never mind choosing between eating & medication. ;)

The only way to discharge a student loan through bankruptcy would be to demonstrate a hardship. I don't mean 'hardship' as in, gee its hard for me to pay. I mean a hardship like I'm completely disabled and cannot work.

Second way out is to emigrate.

Student loans are one of those loans that don't go away. If you file bankruptcy,student loans are very much not exempt. You still have to pay up.

The Bankruptcy Code used to say that student loans could be discharged if they were more than 7 years old AND some other criteria were met. In the past few years, the Code was changed and now the Bankruptcy Code says (in 11 USC 523): "(a) A discharge ... does not discharge an individual debtor from any debt- (8) 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;"

This means that you can only discharge student loans in bankruptcy if you can show that repayment causes an undue hardship on you or your dependents, and like someone said in a posting above, this does NOT simply mean "Gee these things are hard to pay." I read a case once where the debtor became paralyzed from the waist down, and the Bankruptcy Court did not allow him to discharge all of his student loans since he could still work a desk job. I think the posting above by the person who used to work for Direct Loans has some really good ideas to deal with student loans, but please keep in mind that nothing I say in this posting or in any other posting constitues legal advice, it is simply my understanding of the facts.

Please read! If you and your wife owe 80grand you probably don't owe all of that to federal (staford) loans. federal loans do not go away but if you went to a private school that is much more expensive than federal you probably got extra "gap" loans from bank. those loans get to go! I am about to drop about 50g of 120g. that's mostly credit cards and student gap loans.

I have declared Chap. 7 Bankruptcy in 2000. It was discharged, and my student loans were included. However, everyone says I still owe the money. So the question is, does the Judge's word not count? If he accepted the bankruptcy lock, stock, and barrell, it doesn't matter, the student loans still count?

I've been paying them since the mid 80's.... many forebearances.

If the judges word does count, how do I go about enforcing it?

Listing Student loans on the bankruptcy petition does not mean that they are discharged. In order to receive a discharge you must ask the court specifically to discharge the student loans. This is done through an adversary proceeding with notice to the student loan holder. It is much like holding a civil trial during the bankruptcy proceeding.

The discharge you received said that "all dischargeable debts" were discharged. This does not include student loans, backed by a government agency, because they are not dischargeable by statute, section 523(c)8 of the Code, unless certain criteria are met. These criteria need to be determine by the court through a "trial."

Due to bankruptcy reforms in 1998 and 2005, it's almost impossible for the average person to discharge federal or private student loans through bankruptcy.

Although your student loan can't be discharged in bankruptcy, a bankruptcy court may be able to ease an overwhelming debt burden. Some courts may discharge a portion of your student loans, but this is rare and varies by court.

In most cases, the judge will incorporate your student loans into your debt repayment plan under Chapter 13 bankruptcy. Any balance remaining after the payment plan ends will still be due, but your other debts should be paid off by then

A bankruptcy will not remove student loans but will include the student loans in the bankruptcy. The debt will be gone, but any credit report listing will continue to be listed as included in bankruptcy.


Related Questions

can you file student loans on bankruptcy no. But yes you do have to list them in your bankruptcy. And No they will not discharge the debt on them, if they are federal student loans.

Yes, student loans can not be discharged in bankruptcy. You can consolidate your loans and get a smaller payment.

Federal Student loans cannot be discharged in bankruptcy. You must repay them.

Student loans, no. A SBA type loan...probably

If the student loan is a federal loan and not a private loan then the answer is no. Federal student loans can not be included in bankruptcy, you will always be responsible for repayment of FEDERAL student loans.

No, that is the only loan that will not be removed when you become bankrupt or if you pass away.

Student loans do not qualify for bankruptcy except in certain dire situations.

Government insured or provided student loans are NOT dischargeable.

You must list student loans in your bankruptcy. They are not dischargeable, though collections actions are stayed by the automatic stay when the case is filed.

I believe that student loans are a category of debt that is not dischargable in bankruptcy. The bankruptcy will show up on any credit reports, and you may subsequently be unable to et additional loans. I filed for bankrupcy in 1998. I was able to obtain Student Loans despite the bankruptcy in 1999-2000. My past credit history was not considered when determining my student loan application.

The only way to make student loans go away is to pay them off. Recent changes in bankruptcy laws makes it almost impossible for student loans to be discharged in a bankruptcy filing. Or simply avoid students loans, check out the Related Link.

No. and Yes. The default on your prior student loan must be addressed and the loan rehabilitated before you're eligible for more student loans. The bankruptcy would only affect you if you had a defaulted student loan that was written off in the bankruptcy. Otherwise, bankruptcy doesn't prohibit you from applying and received federal student loans. Student loans are NOT automatically written off in bankruptcy and take extra steps with the courts.

Sadly, yes. What a way to start your life though. Adding that to your resume is not a great idea. Student loans are not usually discharged in bankruptcy. While in bankruptcy, collection efforts will cease until the bankruptcy becomes inactive.

Yes, but the student loans don't get cancelled: you still have to pay those.

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.

It's my understanding that student loans are not discharged by bankruptcy any longer. YOu should check this, though

Life insurance loans are not on your credit report.

No to all student loans. However you can apply for a deferral on the basis of financial need.

Yes, as long as you are not in default on your student loans that you may have.

I didn't get your question. Are you trying to ask if you can able to file bankruptcy again even though you had filed previously one? As far as i know, Student loans won't discharge in bankruptcy. It's better consult this from the bankruptcy advisers.

You report all assets and all liabilities. However, government insured or backed student loans are NOT dischargeable.

One can usually get student loans after bankruptcy so long as they meet the other eligibility requirements for those loans. Public policy mandates that a "well-educated" society is a "better" society, so for that reason student loans are protected from bankruptcy so lenders will freely give student loans without fear of being filed on. And, since student loans are excepted from discharge in bankruptcy, they're not generally too skittish about someone who has filed before. I have had several clients ask me that same question, and I tell them what I said above and I ask them to let me know if they ever do have a problem getting a student loan due to bankruptcy. So far, no one has ever called me saying the bankruptcy caused them any problems in getting student loans... for what it's worth. 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. that is not necessarily true. i filed bankruptcy and have had a steady job and even paid off a car loan that was applied for after the bankruptcy and I still cant get student loans. When you file for bankruptcy, you're still eligible for government loans, but not for private loans. These are the two basic types of loans. You should be able to qualify for government loans because these loans are based on need rather than credit

According to my Spanish teacher, student loans are the only things that cannot be "wiped out" by declaring bankruptcy. She told us that the government will continue to reach into your bank accounts until that money is payed off.

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