Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Student loans, even though they are unsecured debts, are not dischargeable in a Bankruptcy. If you had paid the $5,000 to the student loan lender, the Bankruptcy trustee could have taken that money back to evenly distribute to the other creditors.
Please let me know if there is anything else you would like to know.
The Bankruptcy trustee gets 10% of the assets or money he takes. The rest is paid to the creditors in proportion to the size of each debt. You are supposed to receive anything that is left over - if anything is left over.
You are supposed to receive an accounting. If you do not, you can ask your attorney to contact the trustee's office to get one.
Please don't forget to hit the "ACCEPT" button, and then we can continue.
The Bankruptcy court does not care that you were misled. They will say your attorney should have explained the loan was not dischargeable. The money that you had to pay to the court was distributed to all the creditors - including the student loan company. That is how the court does it. It doesn't matter that you thought the student loan was dischargeable.