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FiveStarLaw
FiveStarLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36413
Experience:  Bankruptcy Lawyer. Experienced.
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DUE TO SOME SEVERE MONEY MISMANAGEMENT, AND FINANCIAL MISTAKES,

Customer Question

DUE TO SOME SEVERE MONEY MISMANAGEMENT, AND FINANCIAL MISTAKES, I HAVE $60,000 IN CREDIT CARD DEBT, AND $30,000 IN PRIVATE STUDENT LOANS. I HAVE ATTENDED SCHOOL FOR 2 YEARS, HOWEVER THE $30,000 UNCERTIFIED PRIVATE STUDENT LOANS WERE NEVER USED TOWARDS ANY QUALIFIED EDUCATIONAL EXPENSES. I ATTENDED A COLLEGE THAT COSTS $4000 A YEAR, WHICH I RECEIVED GRANTS TO PAY FOR. I HAVE USED THE PRIVATE STUDENT LOAN MONEY ON CAR REPAIRS, TO CATCH UP ON BILLS, HELPING OUT PARENTS, VACATIONS, ETC..HAVING SAID THIS, ACORDING TO A PROFESSIONAL ANALYSIS ONLINE ARTICLE TITLED "Limitations on Exception to Discharge of Private Student Loans " MY PRIVATES STUDENT LOANS ARE DISCHARGEABLE IN BANKRUPCTY DUE TO THE FACT THEY ARE NOT QUALIFIED EDUCATIONAL LOANS. IS THIS TRUE? WILL THE COURT GET RID OF $100,000 DEBT? ALSO IS THERE A STATUTE OF LIMITATION ON PRIVATE STUDENT LOANS FROM TERI AND CHASE BANK IN OHIO? IF I DONT PAY MY BILLS, WHAT COULD HAPPEN TO ME? I HAVE NO ASSETS.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  FiveStarLaw replied 5 years ago.

Hello,


Thank you for your question. I am happy to assist you.

 


As an individual, there are two types of bankruptcy available. A Chapter 7 and a Chapter 13.


There are distinct differences in between a Chapter 7 and a Chapter 13 bankruptcy.


A Chapter 7 bankruptcy could discharge (erase) all of your credit card debt. It would be an opportunity for a fresh financial start.


A Chapter 13 bankruptcy could reinstate a mortage that is in default. However, it may require that you repay some of your unsecured credit card debt.


Whichever bankruptcy you file, you will be required to list all assets and all debts. Typically all of the debt you discribed would be dischargable.


I hope that the information which I provided was helpful to you.

Customer: replied 5 years ago.
THANK YOU SO MUCH FOR A QUICK ANSWER!! YOU DESERVE A NICE BONUS!! OK, YOU SAID THAT MY DEBTS ARE DISCHARGEABLE. HOWEVER, I AM JUST EXTREMELY CONFUSED ABOUT WHICH PRIVATE STUDENT LOANS ARE DISCHARGEBLE, BECAUSE THE NEW BANKRUPTCY LAW IN 2005 MADE IT VIRTUALLY IMPOSSIBLE TO DISCHARGE PRIVATE AND FEDRERAL STUDENT LOANS UNLESS YOU CAN PROVE UNDUE HARDSHIP WHICH IS ALSO EXTREMELY DIFFICULT UNLESS I BECOME DISABLED. HOWEVER, I JUST DONT KNOW IF UNCERTIFIED PRIVATE STUDENT LOANS FROM TERI AND CHASE BANK FALL UNDER THE NON-DISCHARGEABLE CATEGORY. MY SCHOOL NEVER CERITIFIED ANY OF MY PRIVATE STUDENT LOANS. THE FUNDS CAM DIRECTLY TO ME. THEY GAVE ME A LOT MORE THEN I NEEDED. I JUST WAN TO CLEAR MY CONFUSION ABOUT WHICH PRIVATE STUDENT ARE NON-DISCHARGEABLE. IS THERE A WRITTEN LAW FOR THIS? ALSO IS THERE STATUE OF LIMITATIONS ON PRIVATE STUDENT LOANS IN OHIO?
Expert:  FiveStarLaw replied 5 years ago.
IF UNCERTIFIED PRIVATE STUDENT LOANS FROM TERI AND CHASE BANK FALL UNDER THE NON-DISCHARGEABLE CATEGORY. MY SCHOOL NEVER CERITIFIED ANY OF MY PRIVATE STUDENT LOANS. THE FUNDS CAM DIRECTLY TO ME. THEY GAVE ME A LOT MORE THEN I NEEDED.

Here is the case law on hardship:
"As noted by the district court, there is very little appellate authority on the definition of "undue hardship" in the context of 11 U.S.C. § 523(a)(8)(B). Based on legislative history and the decisions of other district and bankruptcy courts, the district court adopted a standard for "undue hardship" requiring a three-part showing: (1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans. For the reasons set forth in the district court's order, we adopt this analysis. The first part of this test has been applied frequently as the minimum necessary to establish "undue hardship." See, e.g., Bryant v. Pennsylvania Higher Educ. Assistance Agency (In re Bryant), 72 B.R. 913, 915 (Bankr.E.D.Pa.1987); North Dakota State Bd. of Higher Educ. v. Frech (In re Frech), 62 B.R. 235 (Bankr.D.Minn.1986); Marion v. Pennsylvania Higher Educ. Assistance Agency (In re Marion), 61 B.R. 815 (Bankr.W.D.Pa.1986). Requiring such a showing comports with common sense as well." Brunner case.


I am signing off for the night. I will check back tomorrow to see if you have a followup.



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