What Kind of Student Loan Can be Forgiven in Bankruptcy?

student loan

In general, many people think a student loan isn’t on the list of dischargeable loans in case of the bankruptcy. Although a lot of consumers may find it surprising, some student loans may be discharged. It includes student loans related to ‘’career training’’ and Sallie Mae Tuition Answer student loans. A career training student loan refers to loans, made by private lenders. That’s to say, it doesn’t provide financing for four-year college costs.

Among dischargeable career training student loans in a bankruptcy are loans for flight schools, culinary schools, cosmetology school, etc.

Did you file for bankruptcy in 2005? Do you have these types of student loans, but lenders still require you to make the repayment? In this case, you have the option of having a legal claim.

Bar student loan debt forgiven in court

It was in April 2009, when Lesley C. took a CitiAssist Bar Exam Loan of $15,000. During this period of time, she was studying at Pace University Law School.

Thus, she was making payments on a regular basis till June 2012. However, it was in November when she declared bankruptcy under Chapter 7.

Bankruptcy Judge for the Eastern District of New York pointed out that the bar exam student loan was the result of an agreement based on commercial terms. Furthermore, the judge also mentioned that this type of loan is different from federal student loan debt. It turns out that the bar exam student loan is dischargeable in a bankruptcy.

Previously, in similar cases, such loans were often considered educational loans. Thus, they were in the category of not dischargeable loans in a bankruptcy.

About the Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act aims to provide consumers’ protection from bankruptcy discharge order violations. This means that no lender or debt collector has the legal right to gain repayment on a private, non-qualified loan if a person has already declared bankruptcy. If they take this step, they are violating the bankruptcy discharge order.

Do you believe that you have become a victim of illegal collection activities? Then, you have the opportunity of bringing claims against a debt collector. If you succeed in proving that the lender violated the bankruptcy discharge order, a debtor will have to become responsible for actual damages and punitive damages as well. In this case, you can get the compensation that you deserve.

The Fair Debt Collection Practices Act also refers to certain guidelines. Here you can find the definition of consumers’ rights when dealing with debt collectors. In addition to that, the guidelines provide the information concerning penalties and remedies in case of violations.

Do you have a student loan and declared bankruptcy?

A lot of lenders or debt collectors go on obtaining student loans, which may appear on the list of dischargeable loans in bankruptcy. Do you think this describes your situation? If you took a private loan and then declared bankruptcy, but still continue making repayment to your credit collectors, you may have a legal claim.



No Comments Yet

Leave a Reply

Your email address will not be published.

More consumer tips and news are ahead.
Stay in touch.