More details to this question:
I have a full-time job that nets about $3,000 per month. I have six children: four at home, one married, and another in college. I support the four at home and aid the one in college. I am the sole income provider. I am married, and my spouse also relies on my support. My monthly expenses are about $4,500. I have student loans totaling about $120,000: $80,000 of which are private, unsubsidized student loans. I have been trying to make payments on the student loans for the past several months by getting food donations from my church (so not to buy groceries) and using a line of credit. My line of credit is now maxed out, and I am at the end of a long rope. I have exhausted all of my options: I am deferring some student loans, and my current payment on the others is $640 per month. (Payment on all of the loans would be about $900 per month.) Sallie Mae has offered to reduce the payment to interest only for two years, which would reduce payments to $420 per month. But the problem is that there just isn’t enough money to pay these loans at all—not to mention food and shelter expenses. Will bankruptcy help me get back on solid ground with this type of debt? I rent a house; I have a car payment of only $88 per month; I have a line of credit debt of $10,500.; I have no other credit card debt. Please offer your advice.
8 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
at
Law Office of Susan G. Taylor
Update Your Profile
Student loans are not currently dischargeable in bankruptcy, so if you filed now you could eliminate only unsecured debt, the line of credit. Maybe the political wind will change & make private loans dischargeable someday.
Answered on Dec 13th, 2012 at 2:44 PM
Bankruptcy Attorney serving Plantation, FL
at
Moffa & Breuer, PLLC
Update Your Profile
The student loans seem to be the major issue. I suggest that you find out if the student loans fall into the exception to dischargeability under 11 U.S.C. ?523(a)(8)(A)and/or (B). The language there is rather broad and also references a certain section of the Internal Revenue Code. A pure guess is that the student loans would not have been made unless they were of the type that would be non-dischargeable in a bankruptcy case. If they are, then a bankruptcy case might not be much of a help with your situation.
Answered on Dec 13th, 2012 at 2:19 PM
Bankruptcy is not going to help you with the real problem, which is that your living expenses exceed your income by $1,500/month. Bankruptcy can only eliminate past debt and it isn't likely that bankruptcy will eliminate or even reduce the amount owed on your student loans. Unless you are threatened by a wage garnishment, I would suggest putting off what may be inevitable.
Answered on Dec 13th, 2012 at 2:18 PM
Chapter 13 Bankruptcy Attorney serving Bloomington, MN
at
Gregory J. Wald
Update Your Profile
You could eliminate the student loan debt if you and your attorney could convince a bankruptcy judge that it would be an "undue hardship" to be reqired to repay the student loans. This is a difficult standard to meet, but you may have a case from what you have stated about your situation. Besides your income and living expenses, the judge might consider what your future income prospects are, your age, whether you or any family members have disabilities, whether you have attempted to make payments on the student loans, etc. This would require you to file the bankruptcy case, then sue the student loan lender for the determination of undue hardship. Even if you could not prove undue hardship, you could at least pay an amount that is affordable for you for the next five years in a Chapter 13 debt consolidation bankruptcy. You would be protected from collection efforts during that time. A line of credit will in most cases be eliminated in the bankruptcy .
Answered on Dec 13th, 2012 at 2:17 PM
Bankruptcy Attorney serving Phoenix, AZ
at
Law Office of D. L. Drain, P.A.
Update Your Profile
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 Dec 13th, 2012 at 2:16 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
at
Love and Dillenbeck Law
Update Your Profile
You need to consult a bankruptcy attorney in your area. Most give a free consultation and can give you all of your options.
Answered on Dec 13th, 2012 at 1:47 PM
Bankruptcy Attorney serving Seattle, WA
at
Henry & DeGraaff, PS
Update Your Profile
Bankruptcy may offer you some relief from your student loan debt, but it is a more difficult problem to resolve than medical debt or credit cards. Student loans cannot be discharged in bankruptcy unless you can show that not discharging the loans would cause an "undue hardship", and this has been interpreted by bankruptcy courts to be a very high burden. Only a handful of people get any student loans discharged in a given year. However, you may have a good case to discharge at least a portion of your student loan debt. Chapter 13 may also offer you some temporary relief by preventing collections by the student loan creditors while you make a minimal monthly payment. However, this can only last for a maximum of 5 years, at which point you will probably be farther behind than when you started the bankruptcy. It may help you buy time to find better employment, or it may also help you to demonstrate that your student loans are an undue hardship.
Answered on Dec 12th, 2012 at 12:30 PM
Criminal Defense Attorney serving Deltona, FL
at
R. Jason de Groot, P.A.
Update Your Profile
Consult with a bankruptcy attorney about your situation.
Answered on Dec 12th, 2012 at 12:26 PM