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  1. #1
    Join Date
    Jan 2014
    Location
    Chicago, IL
    Posts
    5

    Default Can You Discharge Student Loans Used on Non-School Related Purchases

    My question involves bankruptcy in the state of: ILLINOIS

    Hello,

    I have an exorbitant amount of student loans (both federal and private -- i.e., not on the NSLDS).

    I understand most student loans cannot be discharged in bankruptcy, and those rare cases that have been successful have used the Brunner Test to determine undue hardship. That being said, I have read on a few websites that student loans used for tuition, books, fees, etc. cannot be discharged, but that student loans used for OTHER non-school related purposes (i.e., clothes, home remodeling, medical expenses, etc.) CAN in fact be discharged. Is this true?

    For instance, let's say I have a private student loan for $60,000, and $30,000 of it went to the University for tuition and other fess, and the other $30,000 was money I pocketed and used for everyday living expenses, vacations, clothes, etc. (why would I do this?? because I was a very ignorant 18 year old and did not grasp the impact of my actions). Nonetheless, this happened. If I can prove a portion of the student loan money was not used on school-related purposes, is there a greater likelihood of having that portion discharged in bankruptcy?

    Thank you for your time and help. Please let me know if you would like any additional information.


    (Note: I understand this is my debt and my responsibility to pay back, and so forth. And believe me, if I had the money, I would. I would not be thinking about filing for bankruptcy if I was not already in a poor financial state with over $200k in student loans)


    Kind Regards,
    RJ

  2. #2
    Join Date
    Jan 2008
    Location
    Toledo, OH
    Posts
    16,307

    Default Re: Discharge Student Loans Used on Non-School Related Purchases

    Is this true?
    No, it is not. The only way to get student loans discharged is to prove undue hardship under the Brunner test, in a court action entirely separate from your bankruptcy proceedings. This can take YEARS.

  3. #3
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Discharge Student Loans Used on Non-School Related Purchases

    Lets approach this from a logical standpoint. Why would anyone give you thousands to live on if it could easily be discharged when the bill came.

  4. #4
    Join Date
    Apr 2009
    Location
    Somewhere near Canada
    Posts
    35,894

    Default Re: Discharge Student Loans Used on Non-School Related Purchases

    Quote Quoting Somaseven7
    View Post
    My question involves bankruptcy in the state of: ILLINOIS

    Hello,

    I have an exorbitant amount of student loans (both federal and private -- i.e., not on the NSLDS).

    I understand most student loans cannot be discharged in bankruptcy, and those rare cases that have been successful have used the Brunner Test to determine undue hardship. That being said, I have read on a few websites that student loans used for tuition, books, fees, etc. cannot be discharged, but that student loans used for OTHER non-school related purposes (i.e., clothes, home remodeling, medical expenses, etc.) CAN in fact be discharged. Is this true?

    For instance, let's say I have a private student loan for $60,000, and $30,000 of it went to the University for tuition and other fess, and the other $30,000 was money I pocketed and used for everyday living expenses, vacations, clothes, etc. (why would I do this?? because I was a very ignorant 18 year old and did not grasp the impact of my actions). Nonetheless, this happened. If I can prove a portion of the student loan money was not used on school-related purposes, is there a greater likelihood of having that portion discharged in bankruptcy?

    Thank you for your time and help. Please let me know if you would like any additional information.


    (Note: I understand this is my debt and my responsibility to pay back, and so forth. And believe me, if I had the money, I would. I would not be thinking about filing for bankruptcy if I was not already in a poor financial state with over $200k in student loans)


    Kind Regards,
    RJ

    And of course you have solid evidence that the money was used for frivolous purposes, yes?

    So now you've gone from "ignorant 18 year old" to "adult trying to rip-off everybody".

    Not a wise progression.

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