Anybody have any case law to fight for discharge of student loan debt in Ch7 BK. Here is the scenario, basically we have to declare CH7, won't go into reasons, too long. After taxes, living expenses ect., we have a negative income of about $400/month WITHOUT the student loan payments. DW has approx 65K in student loan and its getting worse every year because the interest alone is outpacing our payments in. Wife no longer works in her degreed field because of stress and the related health problems from the stress, almost went the suicide route until we got her out of it. No ducumentation for this as we couldn't afford the doctors bills with her crummy ins. She now works for $11/hr doing something she finds unstressful. Payments on the loan have always been $550/month and P&Irack about 750/month so bill is only going up. The only info I have ever seen on discharge through BK is if your dead :'), or quadrapalegic on complete disability. The courts seem to be using the Brunner Bankruptcy test as a basis for dismissal. Most people I talk to reccomend death as the easier solution than actually getting a discharge through BK. ANYBODY got any help for me.
you may want to speak to someone from the ombudsman's office of your loan's servicer. They have palns where you can "rehabilitate" a student loan, thus taking it out of default stattus. You need to make 12 monthly on-time payments, that are based on your ability to pay...they are income contingent. After you have made the payments, you might be eligible to consolidate the loans through the governments "Ford" Loan plan...info here: http://www.loanconsolidation.ed.gov They have different repayment plans, once again they have an "income-sensitive plan" check through the info in the link...I believe that they have a plan where you can make affordable monthly payments for 25 years, and after that any amount still owed is forgiven there are not many other options when dealing with the student loan people, no SOL's, they don't even have to go to court to garnish wages, and as you have found out it is nearly impossible to dismiss student loans in BK. it's best to work with them, a something like the above may be your way to work it out good luck
Those numbers are the consolidated rates and their income contingent plan is 20% of your PRE-TAX wages which is where we are at now that we can't afford. We are not currently in default but will be very shortly.
