QUESTION
Can a government loan be covered in bankruptcy?
Asked on Feb 21st, 2014 on Bankruptcy - Colorado
More details to this question:
My husband was married before and we just found out in 1992 his house was not paid for and he also has a student loan. Can anything be done?
7 ANSWERS
The mortgage guarantee is not a problem, and clearly dischargeable. Student loans are typically not dischargeable in a BK. However, if you can prove an "undue hardship" on the debtor or the debtor's dependents, the BK Court has broad discretion to discharge all or a part of the student loan. The Court could make the payments a small amount each month, reduce the interest rate to zero, or any number of other options. The debtor would need to file an "adversary proceeding" against the student loan organization asking for the discharge.
Answered on Feb 25th, 2014 at 4:47 PM
Bankruptcy Attorney serving Huntington Woods, MI
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With a few rare exceptions, student loans are not discharged through a bankruptcy proceeding. However, the government now offers a number of repayment plans that may make the payment more manageable. An income based repayment plan, where you only are obligated to pay 15% of your discretionary income, may be the best option.
Answered on Feb 25th, 2014 at 4:47 PM
This question is far too vague to answer with any degree of accuracy. What does your husband having been married before have to do with anything? What kind of government loan? Is his name still on the title to the home? What is his personal situation - is he disabled and unable to work? I suggest you meet with an attorney in person to get an answer to your questions.
Answered on Feb 25th, 2014 at 4:46 PM
Student loans are NOT dischargable in bankruptcy.
Answered on Feb 25th, 2014 at 5:06 AM
2 Awards
You can discharge a deficiency judgment on a home, but not student loans.
Answered on Feb 21st, 2014 at 8:58 PM
Debt Relief Attorney serving Anaheim, CA
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Marlin Branstetter Attorney at Law
As a general rule student loans are not discharged. There are some exceptions but the requirements are quite strict. There should be no problem with the home loan. Each case is different and you should consult with an attorney who can review the details of your specific case.
Answered on Feb 21st, 2014 at 5:42 PM
Deborah F. Bowinski
He should meet with a lawyer. Depending upon what has happened since, the old house loan may or may not still be collectable. Student loans are generally not dischargeable in bankruptcy, but there are sometimes other options available to aid with the repayment process.
Answered on Feb 21st, 2014 at 5:17 PM