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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I am overwhelmed with student debt that is making it hard for

Resolved Question:

I am overwhelmed with student debt that is making it hard for me to pay my regular monthly debts and am curious what my options are.
Submitted: 5 years ago via RocketLawyer.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
If you file a Bankruptcy, you will be able to have your unsecured debts discharged, but not your student loans, which are generally not dischargeable in a Bankruptcy.
If not having to pay your other unsecured debts makes it easier to pay your student loans, then a Bankruptcy would be a good option

I think this is what you wanted to know. If not, please let me know.
Thank you!
Customer: replied 5 years ago.
Then, there is no way of ridding myself of the student debt as well?
Expert:  cfortunato replied 5 years ago.
Unfortunately, only those who are permanently disabled can have student loan debt discharged.
Customer: replied 5 years ago.

One more question, sorry.

 

When you say rid myself of all other debt, would that include car payments and credit card payments? And not the Sallie Mae and Direct Loan student loans, but what about private loans through Citibank for school?

Expert:  cfortunato replied 5 years ago.
Your liability for credit card bills and the car loan would be discharged. However, if you want to keep your car, you would have to continue to pay the loan, or the car could be re-possessed.
All student loans - private and government - are currently nondischargeable. The pre-2005 Bankruptcy Code allowed the discharge of private student loans, but for all Bankruptcies filed after 2005, the private loans are also not dischargeable.
Customer: replied 5 years ago.

Alright, what if someone obtained a personal loan and put it towards the student loans and then filed for bankruptcy? Would the courts go back to see how the new loans were dispersed or would they be eligible for discharge?

Expert:  cfortunato replied 5 years ago.
Debt that is obtained with no intention of paying it back is non-dischargeable. Unless a creditor could prove the personal loan was obtained with no intention of paying it back, that loan could be discharged in a Bankruptcy.
Customer: replied 5 years ago.

So, by consolidating the student loans into a personal loan, making the payments to the best of my ability for six+ months, and then realizing that I just cannot make ends meet, that would not be grounds for non-discharge becuase I have tried to pay it back?

Expert:  cfortunato replied 5 years ago.

Only you know what your intention is when applying for and receiving a loan. However, if a loan is taken less than 90 days before a Bankruptcy is filed, the court will presume there was no intention of paying it back - even if it is paid for the 90 days. Bankruptcy Stat. 523(a)(2).

After 90 days, the only way a creditor could prove there was no intention of paying back the loan is if the debtor admitted there was no intention.

Customer: replied 5 years ago.

Alright, Thank you very much for your time today.

Expert:  cfortunato replied 5 years ago.
You're welcome!
cfortunato and 2 other Bankruptcy Law Specialists are ready to help you

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