I'm sorry to hear about your situation.
Unfortunately, it is unlikely that bankruptcy will help you significantly. First, as you indicated, discharging student loans in bankruptcy is very difficult. In order to do so, you have to file an Adversary Proceeding against the lender, which is a separate lawsuit during your bankruptcy case. In the Ad Pro you have to convince the court that repayment of the student loan causes such an undue hardship on you or a dependent that the loan should be discharged (see 11 U.S.C. 523(a)(8), HERE
This standard of undue hardship is very difficult to meet. I read a case where a borrower was injured in an accident and paralyzed from the waist down. Borrower filed bankruptcy and Ad Pro to discharge student loans. Ruling: Student loans NOT discharged because borrower was physically capable of working a desk job.
Mainly, the only people I have seen have much success discharging student loans are older people who are living on social security and will never likely be able to work again.
Another angle is to try to show that the loans you have do not fall into the category of protected loans in 11 U.S.C. 523(a)(8), which means you have to show that your student loan is NOT "(i) 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 (ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code
of 1986, incurred by a debtor who is an individual."
This also can be pretty tough to do, especially since "an obligation to repay funds received as an educational benefit" is pretty broad.
Another issue is that most (if not all) attorneys will charge additional fees over and above what the bankruptcy cost for the Ad Pro, fees which you won't get back if you lose the Ad Pro. Ad Pros can get expensive since the lenders often defend them, causing them to go to trial in many cases. Of course I do not know the exact details of your case so this may not apply to you, but many persons seeking to discharge student loans find themselves in the position of having to front $4,000 (or whatever an Ad Pro might cost) for a 5% chance to get rid of their loans.
Finally, even if you do succeed in an Ad Pro, this will not help your mother. Your bankruptcy discharge would not protect her; she would have to file her own bankruptcy and succeed in her own Ad Pro to keep the lender from being able to pursue her.
However, depending on your mother's age and financial situation, she may be able to file bankruptcy and show undue hardship. If she is living on social security, she would likely have a better chance than you at getting the loans discharged.
You might want to meet with an attorney in your area and give them the facts of your case and you and your mother's financial situation and see what the attorney says. A local attorney would have some knowledge if the disposition of your Bankruptcy Court
when it comes to student loan discharge, and many attorneys offer free consultations.
Regarding getting your mother off the loan, I doubt if the lender will let your mother off the hook. The only way to get her off the loan is if you can refinance it in your own name, which is very unlikely. First, it is hard to get an unsecured loan for $92,000, and second, doing so after being unemployed for a year is next to impossible.
Others options are to seek cancellation, deferment or forbearance of the loans due to your unemployment
. You can read more about these options HERE
I'm sorry I didn't have the best news, but I thought you would prefer to get a straight answer rather than being told what you wanted to hear even if it would not come to fruition for you.
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Edited by Joseph Ross on 5/9/2010 at 1:32 PM EST