if you go bankrupt do student loans that are not federal go away?
Im having difficult times economically and im thinking about filing for bankruptcy. I have a student loan with salimae would that go away as well??
Posted February 2nd, 2010 in How To Go Bankrupt. Tagged: difficult times, filing for bankruptcy, student loan.
No, student loans, including private student loans (since the 2005 bankruptcy reform act) are not dischargeable in bankruptcy.
There is a provision for filing a lawsuit in bankruptcy court (formally, an "adversary action") to ask that your student loans be discharged in bankruptcy based on "undue hardship." However, the "undue hardship" standard is so high that virtually nobody can meet it. (I remember reading a case once in which the debtor had a progressively disabling medical condition and could only work part time any more, her husband was totally disabled and unable to work, and they had 3 minor children. The court did NOT grant a discharge of the debtor’s student loans, ruling that she still had the ability to work so could still make payments on them.) Generally, most bankruptcy attorneys won’t even file an adversary action to attempt to get student loans discharged because they know those cases are virtually always unwinnable.
So – bottom line – no, your Sallie Mae student loan would not be discharged in bankruptcy.
February 2nd, 2010 at 2:13 am