QUESTION
I need to be advised in regards to a student loan that I would like to bankrupt on.
Asked on Jan 21st, 2018 on Bankruptcy - California
More details to this question:
The majority of my dept is a student loan that has been lingering over my head for over 20 years. I went to a business college and attained a loan which turned out to be be a Federal Loan. Shortly after graduating from the business college they closed their doors and did not give me a diploma. I am paying for something I never received. It was Sawyer business college in Santa Clara. I have not been able to pay that loan back I have had deferments and went through the entire process to try to get the loan excused with the loan forgiveness program . I never got any information back in regards to the loan they just started sending me Bills again. I know that federal school loans usually aren't eligible for a bankruptcy but I have heard that there is some forgiveness in some cases. So my question is do you think that it's a possibility to take this to court and declare bankruptcy on a federal student loan?
1 ANSWER
Bankruptcy Attorney serving Burbank, CA
Partner at
Law Office of Mark J. Markus
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3 Awards
You can discharge student loans in bankruptcy if you are able to prove, after a trial, that repaying them would constitute an "undue hardship" as that term is defined by the courts in your circuit. It is a very difficult burden to meet and requires you to file a separate complaint and go through a trial separate from your bankruptcy case, so it is not cheap if you are using an attorney.
But in your case, if your college closed while you were in attendance, you can seek a non-bankruptcy discharge. See https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/closed-school for more information.
Answered on Jan 22nd, 2018 at 3:14 PM