BK and Student Loans? I may have to do a BK even though the credit report it self looks better I have some lawyers that are breathing down my neck for a judgment that I can not afford to pay. I plan on going back to school for my second B.A. My question is will a BK keep me from getting student loans? If anyone knows this please let me know, thank you. Smit
I'm not totally sure on that one but I do know if you file with a student loan it can't be included in the bankruptcy..it is not a dischargable debt. So, then thinking that then why would it matter cause you can't stiff the govt and they will take your tax return, etc..in order to collect on it anyways. Seems like they will get their money some way or another therefore getting one should be pretty easy.
Thanks Helen but I am still worried. I hope you are right and I don't have to worry. I want to start in the summer and I don't want anything to get in the way of that. Does anyone know for sure? Has anyone had experience with this type of situation?
I've read that it shouldn't. They can't discriminate against you just for having had to file, but we all know how that goes....maybe talk to sl lenders and see what you can find out. Newstdt
Smit, I don't recall the details of your judgment situation. Could you provide a little more info? It seems a shame since you said you've been working on your credit, to file bk for a judgment. I've read time and again on here about c-netters getting judgments set aside because of deficiencies in proof of service, etc. About the student loans, I know when I got mine years ago, creditworthiness was never taken into account then (although, in retrospect, I think the government would have been doing me a favor if they'd declined my application!). I'm sure someone with recent experience will weigh in soon on this question.
guaranteed Student Loans are just that, guaranteed, they are given by the government and they do not check your credit worthiness. I am almost certain about that. But....if you default on them, don't expect to EVER strong arm them into letting it go, and also they will take back taxes and garnish your wages in a heartbeat........
Re: BK and Student Loans? Smit BK has no bearing on your ability to obtain a student loan. The only caveat is that if you apply for student loans while in BK you must obtain permission from the trustee. If you are filing a chap 7, then as long as it is discharged before you apply for the loans then there should be no dificulty. While they are guaranteed, the reality is that credit does play a role in who will be able to provide the loans. If no private lender will lend, then the state guarantor is required to provide the loans as a lender of last resort. fla-tan
Re: BK and Student Loans? The Judgement it is over $9500. They keep sending letters bi-weekly. We did not put me on the title of the house because we do not want a lean. I am not able to work outside of the home now due to a medical situation so I a'm looking for work at home. I have other R9s that will not come off. 6k to Discover, 3k to Amex and more. I have already done validations, disputes and everything that I can do for the past 2 years. I got rid of about half of the bad items but the big ones still exist. My husband just started a new job which will take about 6 mo to make good money. Although he is not on the judgement, he said if they keep sending letters then I need to do BK. I wish there was another way but we don't see how. Seeing that they may freez our accounts and who knows what else. When we tried to settle my husbands debt they wanted 2k per month, no exeptions. We can't do that!
Re: BK and Student Loans? Correct me if I'm wrong but when I went through BK in '98, student loans were able to be included in BK, if they were in repayment with no lapses (forbearances) for 7 prior years. Student loans also can be discharged I thought for extreme hardship circumstances (socsec income, disabled etc.) PolarisA3
Re: BK and Student Loans? Student Loans can ONLY be Includeded in EXTREME SEVERE CIRCUMSTANCES. Bk7 WILL NOT stop you from getting a Government Guarenteed Student Loans. I'm a living testament The term "Student Loan" could be use also to describe a personal loan used for schooling but not government backed. Sometimes also called "Private Student Loans"
Re: BK and Student Loans? the hardship has to be proved, and even then, they will usually only delay your payments with no interest until you are able to repay. If they go into default, you will NOT get another loan. That is the only rule. I filed a Chapter 13, and I didn't pay a single dime to Student Loans until the Bk was voluntarily dismissed 3 years later.
Re: BK and Student Loans? I wouldn't file a BK just for a judgement. Why do you need good credit anyway if everything is in your hubby's name? I would NEVER file a BK for just owing $9500.00. Heck, I wouldn't file if I only owed $20,000. Especially if the most you owe to a single person is less than $10,000. Its just not worth it. You already have bad credit, what will the BK do for you? In 7 years, those bad listings will be removed, but if you file a Ch. 7, then it will be 10 years before you see anything clean on your report! Just my opinion!
Re: BK and Student Loans? Thanks for your details. I think I would agree with you that your financial situation warrants a serious look at Ch. 7. You aren't able to live a normal life with the $9500 judgment hanging over your head. It's going to follow you around for quite a while (depending on where you live, judgments can be renewed every 10 years), and the 6k to Discover and 3k to Amex are large enough that they aren't going to go away quietly either. You've learned a lot in trying to clean up your credit these past two years, so you'll have a better shot than most at a pretty clean credit report post-bk. I've seen references to bk timing/planning, so you might want to read up on strategy before you file. It's not illegal to time things to your advantage. Once you file, that date is set in stone, so you want to make sure you've thought of everything. This is especially true if you owe any back taxes. I'd be glad to post what little I learned from personal experience about bk and taxes. It sounds like the experts here agree that you won't have any trouble getting a new student loan to return to school -- although, personally, I would never again EVER go into debt to go to college. If you have old student loans and you think the Ch. 7 will help you out with those, they won't automatically be discharged in bk unless you file an adversary complaint -- basically a lawsuit that would determine if repaying the loans would cause you undue hardship. Winning one of these is pretty rare. Prior to 1998, you could discharge student loans if the first payment on the loans became due more than 7 years prior to the bankruptcy filing date (exclusive of any forbearances). But the law changed in 1998, leaving only undue hardship. One good thing I noted is that you and your husband seem to have had an equal part in accumulating this debt (except for the judgment, which you said is yours). One would hope this would make for fewer recriminations later on.
Re: BK and Student Loans? Actually, we paid off all of his debt to buy our new home. He only owed about 5k of bad debt, mostly medical. The $9500 judgement and the credit cards are mine. ( I only told you about a couple, there is more). A few should fall off next year and the 04 but they may do judgements themselves since I owe so much. I have been fighting and fighting not to do a BK for about the last 5 years. But the big boys are starting to come after me since I asked them to validate the debt and they did validate it (my signiture and all). My old student loans were consolidated under my husbands name but they were in default when this happened. Someone said you can't get another loan even if they have been paid in full? Please let me know.
Re: BK and Student Loans? I have a similar situation described above. I have about 11k in credit loans with the following lenders 5200 Boa @ 5% 2200 CapitalOne @ 7% 4000 MBNA 19% (working on this right now...) I am contemplating ending this with chapter 7...I am a newly graudated college student w/o prospects for a career that would provide any sort of payment on these debts. I plan on returning to school in 1 year. Is it best just to do this now? I have 0 assets...no car in my name, and I rent my house. My parents have previously supported me, but now I am self supporting. That means 1200 a month with low wage labor. I drive my dad's car, which may become mine sometime, but right now it is not. I know I have screwed up pretty badly, I had a gambling problem which caused much of this mess. How hard is it establish "hardship" ? What exactly does that process mean for someone like me, previously dependent and newly independent?
Re: BK and Student Loans? Reality in terms of discharging studenbt loans is that they are nearly impossible to discharge. The Supreme Court established the Brunner Test (Brunner v. New York State Higher Educ. Serv. Corp., 831 F.2d 395, 396 (2d Cir. 1987) which list the standards the court may take into account for discharging the loans. Currently, I am working on a case to dismiss someone elses student loans. More companies are offer income contingency programs which make it even harder to discharge the loans. Thus, you make be making small payments for an extended term in order to pay a significant portion of the loans. If you try to discharge them in a Ch 7, you will have to wait until the Ch 7 is order and file a adverssary proceeding against the lender or in some cases the Department of Education. This will involve extra attorney fees as most attorneys consider adversary proceedings non-routine matters. Good luck. I hope this helps. You may want to look into the income contingency programs.
