My question involves bankruptcy in the state of: OH
Under what conditions can student loans be discharged in bankruptcy? Please give specific examples.
Printable View
My question involves bankruptcy in the state of: OH
Under what conditions can student loans be discharged in bankruptcy? Please give specific examples.
Sorry - never. I just filed BK a couple years ago. You can discharge pretty much any other kind of debt, credit cards and even gambling debt. But the student loan lobbyists/crooks made sure that student loan debt can never be discharged in BK.
Whether a student loan is discharged based on hardship is not automatically determined in the bankruptcy process. You must file a petition (called an adversary proceeding) to get a determination.
AZPat, that's not correct - however, the standard for getting a full or partial discharge is onerous.
Very few debtors qualify for any relief. If you want examples, Google is your friend.Quote:
Quoting Pennsylvania Higher Education Assistance Agency v. Taylor, Dist. Court (ND Ohio 2005)
https://www1.salliemae.com/after_gra...bankruptcy.htm
There is a move in Congress to make the private loans dischargeable but so far it hasn't become law. You should write your congressperson if you believe that private student loans should be dischargeable. I doubt the federal student loans will ever be dischargeable unless you can prove undue hardship.
You can apply for them to be cancelled if you are disabled, but that is not through a bankruptcy proceeding.
As Mr. K pointed out, the Brunner test is NOT an easy one to pass, but it can be done, IF the totality of circumstances falls together just right. If you're an employeable, able-bodied 30-something, it's an incredibly high hurdle to reach. It's generally reasonable to project that you've got decades of employment and earning increases/advancement ahead of you. But, if you're a 58 year old with chronic health problems, whose career path is limited and whose earning potential has peaked or is declining, with little or no hope of improvement in the future, you may have a much more successful run at it.
And, as Android pointed out, inability to earn a living due to disability also points to chronic and perminant inability to pay, and can provide an avenue out as well.