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Generally, the answer on whether an unpaid tuition bill or other college charges will be dischargeable or non-dischargeable in a Chapter 7 or Chapter 13 bankruptcy depends upon whether the Debtor (person who files for bankruptcy) signed a promissory note (an agreement signed on or about the same time providing for a definitive amount to be repaid, in specified installments, by a certain time, and at a certain interest rate) with the college or other institution.
If the Debtor did not sign a promissory note, the tuition bill or other college charges will likely be dischargeable in bankruptcy. The key issue is whether the unpaid tuition bill is considered a (educational) loan, or whether it is just a contractual obligation. If it is considered a (educational) loan, then it will likely be a non-dischargeable debt pursuant to 11 USC 523(a)(8) of the US Bankruptcy Code, and numerous courts have held that a tuition bill for which a Debtor has executed a promissory note is evidence that the debt is a (educational) loan.
However, in the absence of a promissory note or other evidence that the debt is in fact a (educational) loan, courts have held that a tuition bill is a contractual obligation which can be discharged in a Chapter 7 or Chapter 13 bankruptcy.
Unfortunately, unless leave is granted by the bankruptcy court, they do not have to allow you to enroll in new classes. They only need to cease collecting on the charges already accrued.
If you owe back payments on utility services and you file for bankruptcy, the utility company cannot alter, refuse, or discontinue your service. This prohibition, although similar to bankruptcy’s automatic stay
, is actually found in a different section of the bankruptcy code, at 11 U.S.C. §366. This section also prohibits utility companies for shutting off or refusing to provide service just because you filed for bankruptcy.
Although the prohibition on utility shut-offs kicks in as soon as you file for bankruptcy, it won’t last forever without further action from you. Within 20 days of your filing, you must provide the utility company with “adequate assurance” that you will pay future utility bills. If you don’t comply with this requirement, the utility company can terminate your service. If you do provide adequate assurance of payment, the utility must continue your service, even if back utility payments are discharged through the bankruptcy.
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