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6 Responses to “What Chapter of bankruptcy will give me a debt-free fresh start, including my now defaulted student loan?”
Chapter 7 involves the selling of assets with the proceeds being distributed to the creditors
Chapter 13 involves a reorganization of debts with repayment over a period of time
Chapter 7 is the way you want to as some unsecured debt can be discharged. But student loans are typically exempt from discharge.
Also, the laws were changed in ‘98 regarding student loans. It’s a lot more dificult to have them discharged.
Discharging student loans in bankruptcy is very difficult to do. Provisions for discharging student loans in bankruptcy were changed in 1998. The bankruptcy court has to rule that repayment would cause undue hardship for you or your dependents.
The court uses a three-pronged test to determine hardship:
If you were forced to repay the loan, you would not be able to maintain a minimal standard of living.
There is evidence that this hardship will continue for a significant portion of the loan repayment period.
You made good-faith efforts to repay the loan before filing bankruptcy (usually this means you have been in repayment for a minimum of five years).
The bankruptcy laws were changed last year by the Republicans and by the Bush Administration. The new laws favor the creditors and not the person.
You can no longer file a BK to get a fresh start anymore. You need to go to mandatory credit counseling first, they will need to determine if you “need” to file BK. Then they will decided how much you can pay back your creditors. There is no Fresh Start. The fees almost doubled too.
Student loans are never discharged in Bankruptcy. I urge you to contact the creditors to work out a payment arrangement. They will simply go to court to get a judgment.
April 29th, 2010 at 10:42 pm
You are not going to like my answer…
Chapter 7 involves the selling of assets with the proceeds being distributed to the creditors
Chapter 13 involves a reorganization of debts with repayment over a period of time
Chapter 7 is the way you want to as some unsecured debt can be discharged. But student loans are typically exempt from discharge.
Also, the laws were changed in ‘98 regarding student loans. It’s a lot more dificult to have them discharged.
Discharging student loans in bankruptcy is very difficult to do. Provisions for discharging student loans in bankruptcy were changed in 1998. The bankruptcy court has to rule that repayment would cause undue hardship for you or your dependents.
The court uses a three-pronged test to determine hardship:
If you were forced to repay the loan, you would not be able to maintain a minimal standard of living.
There is evidence that this hardship will continue for a significant portion of the loan repayment period.
You made good-faith efforts to repay the loan before filing bankruptcy (usually this means you have been in repayment for a minimum of five years).
April 29th, 2010 at 10:42 pm
11 will do it 7 pay back plan
April 29th, 2010 at 10:42 pm
chapter 7 will wipe out almost everything but student loans (federal), if it’s from a bank chapter 7 should wipe it out too.
April 29th, 2010 at 10:42 pm
The bankruptcy laws were changed last year by the Republicans and by the Bush Administration. The new laws favor the creditors and not the person.
You can no longer file a BK to get a fresh start anymore. You need to go to mandatory credit counseling first, they will need to determine if you “need” to file BK. Then they will decided how much you can pay back your creditors. There is no Fresh Start. The fees almost doubled too.
Student loans are never discharged in Bankruptcy. I urge you to contact the creditors to work out a payment arrangement. They will simply go to court to get a judgment.
Good Luck !
April 29th, 2010 at 10:42 pm
Hope it’s not too late :
http://index-go.com/bad-credit-finance-mortgage.asp
or
http://index-go.com/debt-consolidation-refinance-loans-mortgage.asp
Good luck !
April 29th, 2010 at 10:42 pm
you just cant get a student loan discharged but you may be able to get them to settle for less.