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 Posted: Thu Dec 20, 2007 2:23 pm Subject: How do i dischare a student loan? |
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How do i discharge a student loan? i am a single mother well below the poverty line!! there has to be a way? i already filed bankruptcy, but the collectors keep calling? i cant afford a lawyer and i just keep getting the run around elsewhere!
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oasisforever_99
Joined: 20 Dec 2007
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| Posted: Thu Dec 20, 2007 2:33 pm Subject: |
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Students loans are not dischargable in Bankruptcy . . . . I'm not sure there is any way to get rid of them besides paying them off.
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goudah2424
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| Posted: Fri Dec 21, 2007 5:48 am Subject: |
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Since collectors are calling, I am assuming that you are in default. What you need to do is consolidate your loans with the Direct Loan program with the Department of Ed. You will automatically be assigned to the ICR or Income Contingent Repayment plan which will make your payment as a % of your income....if your income is super low, you will be assigned a payment of zero! Yes zero. Even paying nothing will under this program (if assigned) will keep you current.
You wont get a loan discharge. When the courts consider discharge, they will look at your life long earning potential...ie..your income will go up, your children will grow up and you wont be supporting them, getting married, getting a second job. the DL program is your best option and do it quickly before they seize your earned income credit. The link is in the sticky section. Start it now and do not file your taxes until the loan has been consolidated.
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SOAPLADY
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| Posted: Fri Dec 21, 2007 5:54 am Subject: |
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I'm not disputing what Goudah said and I think SOAPLADY gave great advice on how to deal with this, but I have a quesion on the topic. There used to be an exception to the nodischargeability of student loans. If the loan had been in repayment for at least seven years (not counting any deferments), the debtor's lawyer could file a complaint to establish dischargeability and the court could decide whether or not to grant it.
Did they get rid of this when they changed the bankruptcy code a couple of years ago? Or is this still on the books?
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FreakyFriday
Joined: 13 May 2007
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| Posted: Fri Dec 21, 2007 6:37 am Subject: |
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The 7 year rule was eliminated in 1998.
| Quote: | | If the loan had been in repayment for at least seven years (not counting any deferments), the debtor's lawyer could file a complaint to establish dischargeability and the court could decide whether or not to grant it. |
Actually prior to 1998, no hearing was required. Discharges were automatic for student loans, provided you met the 7 year rule.
You can basically thank attornies, doctors and other professionals for the 7 year rule being eliminated. The greatest abuse of this rule was by professionals.... it used to be a running joke that every 3rd year law student could tell you down the day what date they would file BK to discharge their student loans. Abuses where rampant.
Reform of the BK laws for student loans came after the DOE brought in the ICR payment plan thru DL consolidation. The ICR plan makes paying your student loans affordable.
Prior to reform, I saw results of ability to BK student loans. There were several times I saw credit reports of individuals who had filed BK and for some reason the student loan had not been properly discharged. I remember one in particular...BK filed two years previously with over $150k in student loan debt and $200k in credit cards. Two years later there was a $500k house on the report and BMW new car payment on the report. Fair??? No way.
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SOAPLADY
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| Posted: Fri Dec 21, 2007 6:41 am Subject: |
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Interesting. Thank you very much for the info. My knowledge of the bankruptcy laws is so out-of-date . . .
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FreakyFriday
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| Posted: Sat Jan 05, 2008 7:54 pm Subject: How do i dischare a student loan? |
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Hi SOAPLADY ,
Thanks for the useful info. I had been trying to search for a friend but had not been able to do so.
Thanks alot
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success4resource
Joined: 15 Nov 2007
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