My question involves bankruptcy in the state of: TN
I am really stressed about some loans going in collection and considering bankruptcy. All these loans are educational loans - I do not have any other debt (or many assets for that matter). Here is a brief description of the situation: I have 8 negative accounts on my credit history. 3 of these are related to one of my individual student loan (all three related to one loan), which I consolidated and paid in 2010. These should come off my credit history in the next few years.
The other 5 negative accounts are also student loan on which my name was used as co-signor (4 times with my brother and 1 time with his ex-gf). (The long story is that this was the case of identity theft in a different state (OH where I lived earlier), but the lender has rejected my complaints and closed the case. The police has also done some investigation and closed the case). 4 of these are showing up as "Charged Off" (and 'in collection') on my credit report.
After finishing graduate school in 2007, and working for 2 years - finally paying my one individual educational loan in full in 2010. I quit work in 2011 and started my own business in which I am not making any money.
I would like to get guidance on what are my options regarding bankruptcy and clearing my credit score (even if it takes a few years). I am considering the undue hardship clause of bankruptcy for student loans. I have made all the effort to pay off my debts (and paid my individual loan in full in Dec 2010), and the current debts due to educational loans - I didn't receive any benefit for that education as I was the cosigner. I have had a loss in my business in 2011 and currently completely dependent upon my husband's income. I have a 1 year old child and elderly parents to take care off and currently, we are relying on my husband's income for support.
In my research, I have found out:
Bankruptcy Code says (in 11 USC 523): "(a) A discharge ... does not discharge an individual debtor from any debt- (8) for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor's dependents;"
Are there options other than bankruptcy? I do not foresee my business turning around in the next few years for me to be able to pay off these loans (the sum of the 5 open loans is >$150K). My brother and I do not speak with each and he is clearly not interested in paying these off or care for his or mine credit history. I want a fresh restart without having to worry about these loans and collectors coming after me.
Thanks for reading this. I will really appreciate any advice,