Student Loan Bankruptcy. Anybody Succeed?

Edwards Finance > Loans

Q. Student Loan Bankruptcy. Anybody Succeed?

A. Even if (as I am sure is so) inadvertently, and even if (as I also do not question) the present poster was able to achieve a bankruptcy discharge of a student loan in default, this -- especially the unqualified "can" and "very easily" part -- is a potentially seriously misleading statement. While it is not uncommon in some places in the country for collectors of such loans to back off if a timely and credibly factually-compelling application for a discharge is made, the actuality remains that "the law" does _not_ "state" what the poster here says. It (the Bankrutpcy Act) provides instead that only preponderently credible proof of "undue hardship" will warrant a discharge of this sort of obligation where, compared with being "disabled" standing alone or compared with "not being able to work again" standing alone, what sort of "hardship" is "undue" remains a fact-specific and, therefore, case-specific issue. If, again, as a _practical_ matter, a well-presented factually-paticularized claim of "undue hardship" might induce a particular collector (in that firm's self-defined and, therefore, self-applied discretion) to acquiesce in effect (though, also sometimes, not formally) in a discharge of a student loan in default (and well-experienced bankruptcy practitioners will confirm that this often does occur), such discharge is not always "easily" (let alone "very easily") obtained if there is a live/well-presented challenge to the application for such a discharge. A fairer statement of the (more or less) generally-prevailing "test" will be whether the debtor seems realistically able probably to prove - that based on current and realistically projected future income and expenses, s/he would not be able to maintain at least a "minimal" standard of living (including, if there are any, for his/her dependents) if s/he were forced to repay the loans, _and_ - that there are additional circumstances which establish that such a state of affairs is likely to persist for at least significant portion of whatever may be the otherwise applicable repayment period, _and_ - that the debtor has made good faith efforts to repay the loans.

Ask Edwards a Finance Question

Other Questions:

Is it possible for someone with a bankruptcy seven years ago to get home financing?

Is it possible for someone with a bankruptcy seven years ago to get home financing?After 7 years most bankruptcies are off your credit reports, but every circumstance is different. If I were you I wouldn't take any answer to such a serious ...

We are renting from a friendly owner who is really happy with us. She may offer to sell us the house. Can't afford it right now but maybe after intensive saving for two years, which may be do-able. What possibilitites are there if I go throu...

I am renting a condo from a person in Colorado. I have recently signed a 1 year extension on my lease. The condo owner has informed me that he is selling the property and will declare bankruptcy. The landlord said that he will sell the condo...

Knowledge for Bankruptcy Get Mortgage?I need some suggestions on this subject but please NO marketing attempts, just advice. As some of you may know, we want to convert our Chap. 13 to a 7. We are actively seeking a new place to live. We hav...

% of people paying income tax in India-It is indeed true that the percentage of people paying income tax in India is miniscule. Less than 1% sounds like its on the mark, although I am not conversant with the most recent statistics. Not on...

Edwards Finance Menu

Ask a Question
About Us / Me
Contact Me
Privacy Policy

Sitemap

My Favorite Sites

PFBlog
Google Finance
Yahoo Finance
Motley Fool
Nveille's Financial Blog
AllFinanceMatters
Free Money Finance
2MillionBlog
The Terror Finance blog

Q&A Subjects