November 13th, 2008 by Reed Allmand 
Students filing for bankruptcy often receive thousands of dollars in student loan money for their tuition, books, fees and living expenses. Since this is often their only source of income, many students are afraid to file for bankruptcy because they believe that their student loan money can be used to repay creditors in Chapter 7 or Chapter 13 bankruptcy. Fortunately for students, student loan money is protected from garnishment by creditors and cannot be used by a bankruptcy trustee to repay debt. Therefore, even if a student files for bankruptcy while thousands of dollars in student loan money is in their bank account, that money is still exempt under the bankruptcy law. There is no exemption limit for student loan money, so it does not matter how much student loan money is in the debtor bank account.
If you are a student considering bankruptcy, discuss your student loan exemption with a Dallas-Fort Worth bankruptcy attorney to determine whether you should file a Chapter 7 or Chapter 13 bankruptcy and how you can best protect your student loan proceeds.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
View all posts by Reed AllmandSubscribe
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