Discharging Student Loans and Bankruptcy Many people ask me about discharging student loans when they're looking into filing for bankruptcy. Typically, student loans aren't discharged during bankruptcy proceedings. It's not impossible to accomplish if you can show that paying the student loan debt "will impose an undue hardship on you and your dependents". Bankruptcy judges [...]
According to an article in the Star-Telegram, the new income contingent repayment plan for federal student loans is now available. Under the new plan, borrowers can repay their student loans based on their income and the balance will be forgiven after 25 years. The article said: "The income-based repayment plan applies to the Federal Family [...]
For those students who took out student loans, now is probably the worse time to be graduating. The economy is still in the tank and those students loans aren't going away. Plus, the average student has about $22,000 in student loans and may feel overwhelmed to the point of defaulting (which is a no-no). To [...]
If a debtor's delinquent school tuition is discharged in bankruptcy, the college/university is prohibited from refusing to release the debtor's transcript/diploma. Most of us know that student loans are nearly impossible to discharge; but school tuition is not typically considered a student loan and can be discharged during bankruptcy. For example, if a debtor who [...]
According to an article in the Star-Telegram , student loan repayment plans and student loan forgiveness programs just became more beneficial to students while student loan consolidation may not be such a good bet for now. The article said: Federal student loans made after July 1, 2006, are at a fixed rate that cannot be [...]
According to an article in the Dallas Morning News, the Texas Senate voted on Monday to put strict limits on how much state universities can increase tuition and other charges. The article said: After several straight years of huge tuition hikes in Texas, the Senate voted Monday to sharply limit increases in the future, [...]
If you're a student loan debtor who is strapped for cash and having difficulty repaying your student loans, you've probably heard of the William C. Ford Income Contingent Repayment Plan. The income contingency repayment plan allows student loan debtors to repay their student loans based on their current income. Depending on the debtor's income, the [...]
There was an interesting bankruptcy case Kesler, Michael O.; In re (Indiana/Kentucky Regional Council of Carpenters Joint Apprenticeship and Training Committee v. Kesler), involving a debtor who was refused a discharge for loans who took out for carpenter training. The details of the bankruptcy case: While an apprentice in a training program operated by [...]
In the case of Mabry v. U.S. Department of Education National Payment Center the bankruptcy court discharged the student loans of a debtor because they thought it unlikely that the debtor would ever have meaningful employment and that he would never be able to repay his student loans. The debtor who is currently "penniless, homeless, [...]
As we have discussed on this blog many times, student loans can be a financial thorn in the side of many debtors. There are nearly impossible to discharge and they eat away at debtor's assets for years after they've graduated from college. But there's something else fishy about student loans that many students need to [...]