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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2900
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Can student loans (from 1987-1996 with 80K left) be discharged

Customer Question

Can student loans (from 1987-1996 with 80K left) be discharged in bankruptcy if you can show that they were used for living expenses adn not for tuition? My grad school was free but my loans were for other expenses. I have since consolidated all my undergrad and grad loans into one with Sallie Mae.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 5 years ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

Generally all educational debts are not dischargeable.

Terry L. :

If they were acquired thru your educational institution, or were used for books, etc. then they will usually be not discharged in the case.

Terry L. :

The loan documents itself may indicate that they are to be used for educational related expenses.

Terry L. :

Room and board counts as 'education'

Terry L. :

You can file an adversary objection in your bankruptcy case if the documents are silent to this matter, and you can prove that they weren't used for any educational purpose.

Terry L. :

However, it's an uphill battle.

Terry L. :

over the past 15 years, Congress has made it increasingly more difficult to discharge these types of debts.

Terry L. :

the main exception is to show that the loans are an undue hardship.

Terry L. :

This is extremely difficult to prove.

Customer:

Thanks. I see that there is a bill that was introduced about this. Any chnace it could come into play anytime soon?

Terry L. :

You have to show you have no current ability to pay, and no future ability to pay.

Terry L. :

always a chance.

Terry L. :

Call your congressman and urge them to sign it into law

Customer:

thanks.

Terry L. and other Bankruptcy Law Specialists are ready to help you