Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
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Student loan debt is not dischargeable as per the bankruptcy law, without a debtor asking for a hardship hearing,
The Court will not discharge the debt, without such hearing, so their is no reason to wait for Court action.
Since you are protected by the automatic stay, you do not have to make regular student loan payments during Chapter 13 bankruptcy. Your student loans will be paid through your Chapter 13 payments according to the terms of your plan. If you have little or no disposable income, you may not have to pay anything towards your student loans in your repayment plan
You can still pay back a portion of your student loans through your Chapter 13 plan. The benefit of Chapter 13 bankruptcy is that you only pay back what you can afford. If you cannot afford your regular student loan payments, you can lower your monthly obligations by paying a smaller amount through your Chapter 13 plan. Since Chapter 13 bankruptcies can last as long as five years, this can allow you time to increase your income and more easily afford your payments after bankruptcy.
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This can be done through a motion requesting an unde hardship, be aware this is a heavy burden for you,
Courts use different tests to evaluate whether a particular borrower has shown an undue hardship. A common test is the Brunner test which requires a showing that 1) the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for the debtor and the debtor's dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987). Not all courts use this test. Some courts will be more flexible, some less.
http://www.studentloanborrowerassistance.org/bankruptcy/You must file a petition (called an adversary proceeding) to get a determination. This samplegives you an idea of what your complaint should look like.
If you already filed for bankruptcy, but did not request a determination of undue hardship, you may reopen your bankruptcy case at any time in order to file this proceeding. You should be able to do this without payment of an additional filing fee. Chapter 10 of NCLC's Student Loan Law manual includes extensive information about discharging student loans in bankruptcy.
Even if you cannot prove undue hardship, you still might want to consider repaying your student loans through a Chapter 13 bankruptcy plan.
It needs to be applied to the entire debt, and it should be requested as soon as possible,
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