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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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hello I am getting extremely frustrated due to the enormous

Customer Question

hello I am getting extremely frustrated due to the enormous number of contradicting information. . I've asked many attorneys face to face, and online. but no definite answer yet. please I need your help. I have $49,000 in PRIVATE student loans. I am aware as of 2005, all student loans are non-dischargeable. however, according to the congress a private student loan still has to meet the "qualified education loan" requrement in order for it to be non-dischargeable. all of my private student loans were NON-certified, meaning school never certified the nor were aware of them. the banks sent the checks directly to me. I was told I can spend the money on any expense related to my education including food, rent, trips back home, comouter etc..I was told by some lawyers that if a private student loan exceeded the cost of education minus grants and other aid (which by the way grants covered all of my tuition) and if exceeded expected family contribution, and if you did not use the funds to cover qualified education expenses, it MAY be dischargeable. and some attorneys said the opposite, they said, it doesnt matter the definition of qualified education expenses is so vague. so I'm just confused now. please help.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 7 years ago.

You may want to consider a chapter 7 bankruptcy.

Some student loans may be discharged in a bankruptcy if they are not considered to be "qualified" student loans.

Only loans that satisy the requirements under 26 USC 221(d)(1) are considered a qualified education loan.

Here is an informaative article on the subject.

Thank you,
Customer: replied 7 years ago.
thank you very much for your prompt response. I was already aware of the article you're referring me to. I read that article back in 2008, and I literally memorized die to my concern. however, when I approach some attorney and refer to this article, they give me a completely different answer. they say congress never truly defined what is considered education expenses, and they say it's so vague. and some even say, the court doesnt care what you spend the money on because you signed a promissary note sataing that you will use the funds for education expenses, but other lawyers say yes the private student loans may be dischargeable if you can prove that they exceeded the expected family contribution or cost of attendance minus other aid, and if you did not use the funds to cover education expenses. so I'm just so confused sir?? I dont know what to think anymore?? can you please help address my concern.
Expert:  Ellen replied 7 years ago.
You may want to retain local counsel to determine how your specific judge would use this issue.

When you file your chapter 7 bankruptcy, you can list the student loan and file an adversary proceeding to determine the dischargeability.
Customer: replied 7 years ago.
Relist: Incomplete answer.