Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.
Are these private loans or subsidized and unsubsidized Stafford loans?
Thank you for the additional information.
Question: I would like to know what my rights are concerning student loans and bankruptcy. Searching on the internet it looks like it's almost impossible to include student loans in bankruptcy. I was unable to complete my college degree and had to withdraw from school. I have around $95,000.00 worth of private and government loans. My now 78 year old father co-signed on the private loans totaling around $60,000.00. Currently all but one is in forebearance and it has been turned over to a collection agency. I am 50 years old and unemployed at this time, however I am actively looking for a job and will be glad to pay back my student loans, but there is NO WAY I can afford the kind of payment they will expect me to pay monthly. I have called and inquired about reducing payments to an amount I can afford and basically they told me, you can pay what you can afford but you and your co-signer will continue to get phone calls and letters until you pay the required amount.
Response 1: Bankruptcy may not be a viable option if most of your debts are student loans as most student loans are not discharged in bankruptcy and may only be discharged in certain circumstances upon a showing of undue hardship, which is done through filing of an adversary proceeding, a litigation within the Chapter 7 bankruptcy case but separate from the regular bankruptcy case. Unless you file this adversary proceeding in your bankruptcy case to determine the dischargeability of the student loans and the Bankruptcy Court ruled in your favor that the loans are dischargeable, the student loans are not discharged in your bankruptcy. See 11 U.S.C. Section 523(a)(8).
Nonetheless, if you have a lot of credit cards debts that are dragging you down, which is making it more difficult for you to pay the student loans, then you may consider chapter 7 to get rid off those debts to give you a breeding room. You have to meet the means test in order to file for chapter 7. Also, while you are in Chapter 7, you can negotiate with the private loan servicers about reducing your payments. They would be more inclined to negotiate with you at that time. In addition, all collection calls must stop while your bankruptcy is pending.
If your income is equal to or less than the median income for your household size, you may be able to file for Chapter 7, all things being equal. Click here to see the current income guidelines:
For the Stafford loans, you may try to speak with your current servicer about consolidating with Ford Direct Loan Program, through the Department of Education. If you are approved under the Ford Program, you would be able to pay based on your adjusted income.
Click here to get more information on the Ford Program:
My father is 78 years old and like I said I am 50 so there is no way I want to be harrassed with this for the rest of my life. Also can they do anything to my father's retirement check as far as garnishing it?
Response 2: No. His retirement check is exempt from garnishment.
Can they put any type of lien on his house?
Response 3: Unfortunately, yes but only after they file a lawsuit and obtain a judgment on the lawsuit..
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