QUESTION
Are private student loans dischargeable in a Chapter 7 bankruptcy or is 13 better?
Asked on Feb 14th, 2013 on Bankruptcy - New York
More details to this question:
My daughter filled a chapter 7 last year in which all her private student loans were discharged but because the lawyers did not check the block where it asks if these loans have a co-signer.
The same firm has told my daughter that I would have to file a chapter 7 also to get them off my credit report. I had a free consultation with this firm today and they said that they don't do student loans.
Then he said that I was over the median income level for a chapter 7 and he offered me a chapter 13 at $700 per month.
I read the stipulations of a chapter 13 and it says that the plan is only good if I can meet the payments.
He said between me and my wife we have an extra $550 in disposable income, so with him offering me a plan that exceeds my disposable income already violates the program and puts me at a disadvantage.
All my expenses were taken into consideration and my wife is not filling. Do you think he was right in offering me this program.
11 ANSWERS
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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If it is a federal student loan, no they are not dischargeable in either. If a loan or just past due tuition from a private school, they may be.
Answered on Feb 20th, 2013 at 10:53 PM
I guess it depends on what you mean by "private" student loan. Either way, there is no "better" chapter. Most student loans are not dischargeable in bankruptcy. In a 13 you can pay down the loan, but in the end, you still owe the money. If by "private" you mean something that is not really a student loan, then either will discharge it.
Answered on Feb 20th, 2013 at 9:37 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Talk to another chapter 13 attorney. That was you can compare their answers. Please understand that chapter 13 bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step.
Answered on Feb 20th, 2013 at 8:42 PM
Private student loans cannot be discharged in any form of bankruptcy unless there is a trial in which the student proves that s/he is eligible to discharge the debt because of an "undue hardship." The box that is checked concerning the debt is for statistical purposes only and is otherwise meaningless. If a lawyer is promising that student loan debts can be removed from your credit report, run out of the office as fast as you can!
Answered on Feb 19th, 2013 at 5:43 PM
General Practice Attorney serving Crystal Lake, IL
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Bruning & Associates, P.C.
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Unless you have a good reason otherwise to file bankruptcy now, I would wait and see if the student loan companies will pursue you for your daughter's student loans. When the primary borrower's liability is discharged in bankruptcy, lenders occasionally will write off the entire balance, not just the balance against the primary borrower. That said, the liability on these loans will still be out there for you, and if you come into money (inherit a house, win the lottery, etc.) you could lose it if they decide to continue the collection efforts against you.
Answered on Feb 19th, 2013 at 5:43 PM
Complex Litigation Attorney serving Costa Mesa, CA
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Thomas Vogele & Associates, APC
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Student loans are non-dischargeable whether they are private or government loans. There is a small window by which a debtor can discharge such debt but less than 1% actually qualify.
Answered on Feb 19th, 2013 at 5:41 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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IN NJ, private student loans are not dischargeable yet.
Answered on Feb 19th, 2013 at 5:41 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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Simply: as of right now student loans are not dischargeable in bankruptcy unless you can show a severe disability or long term inability to pay them back.
Answered on Feb 19th, 2013 at 5:40 PM
Deborah F. Bowinski
Generally private student loans are not dischargeable in bankruptcy without serious litigation through an adversary proceeding. If your daughter filed a chapter 7 bankruptcy her student loans may or may not have been discharged in that filing. A cosigner's obligations regarding student loan debt are no easier to discharge than the primary borrower's obligation. I suggest that you consult with a bankruptcy attorney with specific student loan expertise before taking any action related to these loans.
Answered on Feb 19th, 2013 at 5:40 PM
Bankruptcy & Debt Attorney serving Syracuse, NY
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Theodore Lyons Araujo
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This is a very complicated analysis that has to be done by an experienced bankruptcy attorney.
Answered on Feb 19th, 2013 at 5:37 PM
Bankruptcy Attorney serving Seattle, WA
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Henry & DeGraaff, PS
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Student loans, whether private or federal, are not discharged in any bankruptcy unless you have trial to determine that you meet the special circumstances justifying discharge. A chapter 13 bankruptcy will give you some temporary relief from the student loan creditors collecting against you, but unless the loans are paid in full before you complete your chapter 13 or your daughter can keep current on the payments, you will be facing collection again when your bankruptcy is finished. You should speak with an attorney who is familiar with student loan issues if that is you major debt concern.
Answered on Feb 19th, 2013 at 5:37 PM