Student Loan Chapter 7 BK


M

Mona

I am filing for Chapter 7 and completing the forms myself due to lack
of funds to hire an attorney. A few years back I worked for an
attorney and completed BK forms on occasion so I am comfortable with
everything except listing my student loans. Can someone assist me with
the correct schedule to list them on etc.

There is one other issue concerning my student loans. I am 100%
disabled and on SSI now due from a spinal infection which has left me
a functioning paraplegic. I was in school 2 years ago and working
despite the disability. Since the time I finished school but lost my
job and my disability has gotten worse. There is a slim chance that
someone may hire me. But after applying for over 250 jobs in the last
18 months and not being hired I am beginning to think no one will ever
hire me.

If I want to get my student loans discharged is it best to try with
the bankruptcy or should I do it with the lending institution?

Thanks,

Marcie
 
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T

Thoth

Mona said:
I am filing for Chapter 7 and completing the forms myself due to lack
of funds to hire an attorney. A few years back I worked for an
attorney and completed BK forms on occasion so I am comfortable with
everything except listing my student loans. Can someone assist me with
the correct schedule to list them on etc.
You'd list them on schedue F. If the loans haven't been consolidated I list
the total and the period of time during which the debts were incurred (E.g.,
1998 -- 2002).
There is one other issue concerning my student loans. I am 100%
disabled and on SSI now due from a spinal infection which has left me
a functioning paraplegic. I was in school 2 years ago and working
despite the disability. Since the time I finished school but lost my
job and my disability has gotten worse. There is a slim chance that
someone may hire me. But after applying for over 250 jobs in the last
18 months and not being hired I am beginning to think no one will ever
hire me.
I'm sorry to hear that.
If I want to get my student loans discharged is it best to try with
the bankruptcy or should I do it with the lending institution?
I would start with the lender, but wouldn't expect too much. If your
student loans are guaranteed by a governmental entity you may be qualified
for a income sensitive repayment. In the district in which I practice these
cases are defended by offering such repayment programs. That said, the kind
of disability you describe seems pretty good justification for discharge.
Are you familiar with the controlling case law?
 
L

Lost-In-Translation

For total disability, it's best to take care of that through the student
loan program. Your doctor will have to complete the disability form, and
that should take care of it.
 
M

Mona

Thoth said:
You'd list them on schedue F. If the loans haven't been consolidated I list
the total and the period of time during which the debts were incurred (E.g.,
1998 -- 2002).


I'm sorry to hear that.

I would start with the lender, but wouldn't expect too much. If your
student loans are guaranteed by a governmental entity you may be qualified
for a income sensitive repayment. In the district in which I practice these
cases are defended by offering such repayment programs. That said, the kind
of disability you describe seems pretty good justification for discharge.
Are you familiar with the controlling case law?

I am not familar with the controlling case law in California where I
now live and took out the loans 3 years ago. I am pretty good and
resoureful when it comes to informing myself in such matters.

You gave me some good information to help me get the loans under
control in some way. I will look into income sensitive repayment and
do some research on the controlling case law and see what I can find
out.

Thanks for your help!

Marcie
 
T

Thoth

Mona said:
You gave me some good information to help me get the loans under
control in some way. I will look into income sensitive repayment and
do some research on the controlling case law and see what I can find
out.
I just got some information from SallieMae on Income-Sensitive Repayment
(ISR). I still have more questions, but basically the ISR program allows
you to service all your federal funded student loans for as little as 4% of
your gross income. If 4% turns out to be less than the monthly interest,
the balance is covered by a forbearance and capitalized. You must requalify
every 12 months, but the application looks very simple, and the only
documentation required is proof of income.

Here's a link to case law that may help. http://www.bklaw.com/pena.html

Check here for the Federal Student Aid site:
http://www.ed.gov/offices/OSFAP/DCS/loan.cancellation.discharge.html
 
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Discharging Student Loans

You should consider talking in detail with a bankruptcy attorney to determine if the student loans would be able to be discharged as part of your bankruptcy case. In order for student loans to be discharged in bankruptcy you have to meet an undue hardship standard. Once you file bankruptcy you have to file an adversary proceeding and show that you meet this standard. This website describes better the standard that you have to meet in order to discharge the student loans in Chapter 7 bankruptcy.

socaladvocates.com/student-loans-and-bankruptcy

It sounds like a difficult standard to meet for most people but you would benefit from talking to an experienced bankruptcy attorney to determine if your situation falls into this category. You may have a good chance given what you have described of your situation. This is definitely a complex area of the law and you wouldn't want to go at it alone.
 

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