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TMcJD, Attorney
Category: Bankruptcy Law
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Experience:  Bankruptcy Attorney
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I have a discharged bankruptancy and listed in the discharge

Resolved Question:

I have a discharged bankruptancy and listed in the discharge are signature loans that I cosigned for my son. Salliemae contends that these loans cannot be cancelled but according to research on the internet, signature loans are unsecured loans and carry a much higher interest rate which leads me to believe that as unsecured loans and they can be discharged. My lawyer at the time contends further that there was no objection by Salliemae at the creditors meeting.
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  TMcJD replied 4 years ago.

Hello, I will be happy to assist you with your question. I am a real attorney and strive to provide the most professional service possible. However, I cannot provide legal advice - I can only give you information concerning the legal issues raised by your question. After receiving your answer, please let me know if you need clarification (or if I misunderstood and didn't address your question).


The issue is not whether the loans are secured or not -- all traditional student loans are unsecured debt.


The issue is whether a signature student loan is dischargable under the bankruptcy code. Almost all student loans are NOT dischargable.


The bankruptcy code provides that "A discharge ... does not discharge an individual debtor from any debt ... for (A) (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"


The only exception is if "excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents," in which case the loan is dischargable.


This part of the bankruptcy code makes almost all education/student loan presumptively non-dischargable. As such, the creditor does not need to take any affirmative action or make any objections to maintain the non-dischargable status of the loan. Rather, if the debtor seeks to discharge the loan, the debtor must file an adversary proceeding against the creditor to have the student loan deemed dischargable as not falling within the definition of a non-dischargable loan (or by showing that non-discharge would result in undue hardship).


This website provides some very good information with regard to this topic:



As noted above, if you need clarification, please do let me know.


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