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Can declaring bankrupcy erase student loan debt and how odes it work? |
How do bankrupcy laws work really like chapter 7 and 13? Can they erase student laon debt? How long does it stay on your cerdit report for I heard like 10 years which would not be good. Any help would be great! In general, you cannot 'erase' government guaranteed student loans through bankruptcy. There are a few exceptions, if you can show that paying back the student loans would result in 'severe hardship', but those exceptions are very rare. Government guaranteed student loans are also forgiven if you die or become disabled. If you are having issues paying your government guaranteed student loans, there are a lot of different payment plans that can be implemented, plus payments on the loans can be temporarily suspended if you return to school, or have a loss in income. Check with your lender. Private student loans can be forgiven through bankruptcy. Chapter 7 bankruptcy stays on your credit report for 10 years after it is discharged. Chapter 13 bankruptcy stays on your credit report for 7 years after discharge. you can not erase any dept what so ever owed to the goverment you cannot erase student loan debts. and yes they stay on your report for 10 years. Student loan debt is specifically excluded from bankruptcy protection. You can't run away from it. It's a really nasty form of indebtedness. They own you until you pay them off or die, and even then, I think they can still come after your estate. Remember, you're not the first guy to think of this. The guys that write these laws went to school too. They're not going to let an obvious loophole like this get onto the books, because they know everybody would use it. Normally you cannot erase student loand debt since the vast majority of them are backed by the government. Uncle Sam is going to get his money. The details of your situation however is best looked over by an attorney, especially now that the bancruptcy laws have changed to make it harder to declare bancruptcy. Y Yes, A buncruptcy stays on your credit report for 10 years and if you ever want a government job with a security clearence you will not get it. Because of a change in law, you now must go through "credit counseling" prior to bankruptcy. They will possibly negotiate lower rates or total debt to fit your ability to repay your obligations. Student loans can not be erased unless you become permanently disabled. With the changes to bankruptcy law, you pretty much have to be disabled and unable to work to get much of your debt erased. http://www.moranlaw.net/studentloans.htm... |
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