Q: If I file for bankruptcy, what happens to my student loan debt?
A: IF your student loans are federal student loans, then they are not discharged. They will go into a deferment status for while in Bankruptcy. I warn you, if you do this, continue to make your student loan payments, even if deferment occurs, because if you do not, late fees, and interest continue to run and when you get out of Bankruptcy, they will be huge and unmanageable.
A: In almost all cases your student loan debt will not be discharged in a chapter 7 filing. It is very difficult to discharge student loans in bankruptcy. They may leave you alone for the few months you are in the chapter 7 but after that you would be back to dealing with the collection of the loans as if no bankruptcy had been filed. See a bankruptcy lawyer to review your situation. Sometimes a chapter 13 might be a better option with student loan debt. Good luck!
A: Absolutely nothing, unless your lawyer can show that repaying the debt would expose you and your family to undue hardship. This law was changed during Bill Clinton's presidency. Before then, if one had owed the student loan debt for seven years, one could seek its discharge. I used to do that with some frequency.
Now, there is a kind of paradox in the law. People who need that kind of representation can't afford that kind of lawyer.
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