thinking of filing bankruptcy on 10 year old student loan

Hi carmicle, latrice,

Discharging a student loan through bankruptcy is really very tough. Student loan is such liability that is better to pay off.

Before eliminating a student loan through bankruptcy, the court checks-

• the borrower had tried to pay the loan
  
• there should be enough proof that supports the borrower has been passing through a financial hardship and that is supposed to continue in future
  
• forceful repayment will restrict the borrower to maintain the minimum standard of living.
  

I filed Ch 7 in 2000, and it was discharged in 2001. My Sallie Mae loans were included in the bankruptcy. I sent over my discharge info, but they still went to collection - where I was told the loans could not be discharged. I have fought this over and over - they took my tax refund last year. I finally started working and got in touch with Allied to rehab the loan, but reading the postings in the forum, maybe my loans were included and I don't need this? Please clarify more on the loans/bankruptcy issue.
Also, I have two entries for each loan on my credit report - 1 for Sallie Mae, and 1 for Fla Student office of whatever. I have asked Experian to correct this, but they said it is something to do with 3rd party transfer and they cannot. How can I get my credit report to show only 1 entry for each loan? I feel it is affecting my credit score.
Thanks for all of your help, I'm so glad that I found this forum! : )

R,

Welcome to forums. Student loans are rarely discharged in bankruptcy. If the bankruptcy court finds that you have to face a true financial hardship to repay the loan, then only student loan is written off.

To qualify under this clause you have to show that it won't be possible for you and your dependents to maintain the minimum standard of living if you continue to pay the loan back.

Make sure that your loan was completely written off in the bankruptcy. Sometimes court allows canceling part of your student loan also.

I think if you would have filed Chapter 13, this didn't happen with you, since Chapter 13 makes the debtor free from any unpaid debts after bankruptcy.

Regarding your credit report, I would suggest you to compare reports from three bureaus. You've the right to dispute an incorrect entry. Also try to contact your loan holder and negotiate with them so that they report the accounts in your favor.

Bryan

Absolutely not! Student loans are government loans and they can't be discharged! Nor is there a statute of limitation on them. For crying out loud! Ten years and you paid nothing? That's the same as stealing! Why on Earth did you take this out if you apparently had no intention of repaying?

Unfortunately, you aren't allowed to file bankruptcy on a student loan if you have not made any attempt to repay or inter into a repayment agreement. I found this out when I thought my student was discharged in a bankruptcy in 1989 and it wasn't even though the judge declared it, the government doesn't recognize it to be discharged. I have recently tried to go back to college after 25 years and it even affects the pell grants as well. :oops: :cry:

It doesn't matter what chapter you file, and even if the judge says it's discharged, the government doesn't accept it as paid off. Unfortunately, even if you are in hardship it's not considered a discharge factor. So word of warning, don't take out a student loan unless you are able to repay it. Also, it affects the Pell Grants too.
I'm not a dead beat that doesn't pay my bills but I was very ill and I had to drop out of business college and I wasn't able to pay it back to the government. If I had only paid $5 a month, it may been considered repayment in full after 6 months which I didn't know at the time.

The laws pertaining to student loans and BK changed in 1998. Prior to this, if it had been more than 7 years from the time the loan became DUE, they could be discharged. Post 1998, neither federally insured or private loans can be discharged in BK unless you have a seperate hearing. In this seperate hearing, they look at your ability to repay the loans in the future...so they look at your income potential for the next 25 or so years. It is very difficult even with this hearing to get them discharged.

When filling BK, all student loans must be listed on the BK matrix. However, if you read ???? 523. Exceptions to discharge, you will see is ...
(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;