Are private student loans dischargeable through bankruptcy?
Unlike the vast majority of consumer debts owed to private lenders, educational loans made by private lending institutions are protected as non-dischargeable under Section 523(a)(8) of the Bankruptcy Code.
Can a private student loan be discharged in bankruptcy?
Except in rare situations, bankruptcy law states that neither federal loans nor private student loans are eligible for a bankruptcy discharge. To discharge a student loan in bankruptcy, you must file an adversarial proceeding (AP). An AP is a lawsuit filed within the bankruptcy court, after a bankruptcy case has already been filed.
What kind of bankruptcy do you need for student loans?
There is no special type of bankruptcy called “student loan bankruptcy.” Succeeding in having student loans discharged through bankruptcy involves filing Chapter 7 or Chapter 13 and then taking an additional step, which is filing an “adversary proceeding,” or AP. The AP must be filed to have your student loans considered for discharge.
How can I discharge my student loan debt?
Succeeding in having student loans discharged through bankruptcy involves filing Chapter 7 or Chapter 13 and then taking an additional step, which is filing an “adversary proceeding,” or AP. The AP must be filed to have your student loans considered for discharge.
Do you have to file AP to discharge student loans?
The AP must be filed to have your student loans considered for discharge. Before you can petition a judge to discharge your student loans, you must file Chapter 7 or Chapter 13 bankruptcy.
Can a federal student loan be discharged in bankruptcy?
It seems most people intuitively grasp that you cannot discharge federally guaranteed student loans (or federal student loans) in bankruptcy. However, many borrowers struggling with private student loans are hopeful that private student loans can be discharged bankruptcy.
Which is easier to discharge federal or private student loans?
It is easier to discharge private student loans in bankruptcy. If you find yourself in bankruptcy and contemplating an adversary proceeding, it is easier to discharge private student loans than federal student loans. Reason being, federal student loans have numerous repayment programs.
Can a federal student loan be used for a private loan?
Private student loans are loans extended by private lenders that are not backed by the federal government. These loans are only to be used for qualified educational expenses. Private student loans don’t have many of the relief provisions allowed for by federal student loans.
How can I get rid of my private student loan?
The best way to reduce or eliminate your private student loans might be a debt settlement. It would be rare for a debt settlement company to attempt to negotiate a settlement for a private student loan. But, there are some student loan attorneys that specialize in such settlements.