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RobertJDFL
RobertJDFL, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 12132
Experience:  Experienced in multiple areas of the law.
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I live in New York and have Student Loans in default since

Customer Question

I live in New York and have Student Loans in default since around 2000. I recently received a letter from a collection company for payment. My questions are:
1. Can I file an order to show cause with the collection company for a student loan debt?
2. Can a student loan debt be vacated?
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  RobertJDFL replied 1 year ago.
Thank you for your question. It will be my pleasure to assist you. If after reading my answer, you need clarification or more information, use the REPLY feature, I'm happy to help.An order to show cause is something you'd file in a legal proceeding, which isn't the case here. They're contacting you as the debt collector. Under the Fair Debt Collection Practices Act (FDCPA) however, you are entitled to debt validation. That is, the debt collector must be able to show that they were assigned the debt (more likely in this case) or that they own this debt. This request can be made over the phone, but for your own protection and records, it would be better to do it in writing. If the creditor cannot validate the debt, then they cannot collect it, nor can they report it on your credit report.You can get a sample letter here:http://www.creditinfocenter.com/forms/sampleletter9.shtmlDischarging a student loan debt, while not impossible, is very difficult due to a change in federal law several years ago. While it used to be easier to discharge them in bankruptcy, now, discharging a student loan requires you to prove that paying back the student loan would cause you an undue hardship. For example, if you became totally and permanently disabled after you took out the loan and now could never pay what you owe, you may have a good argument.If you file Chapter 7 or Chapter 13 bankruptcy, you may have your loan discharged in bankruptcy only if the bankruptcy court finds that repayment would impose undue hardship on you and your dependents. This must be decided in an adversary proceeding in bankruptcy court. Your creditors may be present to challenge the request. The court uses this three-part test to determine hardship:If you are forced to repay the loan, you would not be able to maintain a minimal standard of living.There is evidence that this hardship will continue for a significant portion of the loan repayment period.You made good-faith efforts to repay the loan before filing bankruptcy (usually this means you have been in repayment for a minimum of five years).Failure to satisfy one of the three prongs would result in a denial of a discharge. ​​