I have over $65,000 in student loans and filed Chapter 7. All my balances on my credit report went to 0 and accounts are showing as closed. Does this mean they are discharged? My 431 meeting is next week.
Hi there OP and welcome to myFico. I created your own thread on this subject as the one you posted in is over a year and a half old.
While you are in BK they will show 0 and if they are guaranteed by the federal government once you are discharged they will reappear with the current balances unless your attorney can get them discharged on a hardship exception.
Also, keep in mind that IF your loans were actually discharged in your BK, you will never be able to get SL's again backed by the government. You will have to get private loans instead.
Need to correct the above. . . Please see 11 U.S.C. § 525( c ):
(1) A governmental unit that operates a student grant or loan program and a person engaged in a business that includes the making of loans guaranteed or insured under a student loan program may not deny a student grant, loan, loan guarantee, or loan insurance to a person that. . . has not paid a debt that is dischargeable in the case under this title. . .
(2) In this section, “student loan program” means any program operated under title IV of the Higher Education Act of 1965 or a similar program operated under State or local law.
There is no exception to the above anti-discrimination provision based upon the type of debt that is discharged therefore, should one succeed in proving a hardship and discharge student loans either in part or in full, Section 525 protects that person as it relates to obtaining such loans down the road.
Thanks Des, I was under the impression though that any future FSL wouldnt be possible if prior SL's were DC. I was told that actually from my SL proivider prior to filing myself, and actually had a friend who DC prior FSL years ago, and went back to school..applied for FSL again and was denied for that reason!....Interesting...
@Sabii , do you have any knowledge on this as well?
I was under the impression though that any future FSL wouldnt be possible if prior SL's were DC. I was told that actually from my SL proivider prior to filing myself, and actually had a friend who DC prior FSL years ago, and went back to school..applied for FSL again and was denied for that reason!....Interesting...
I think the language of the Statute is quite clear and I would love to take on a case such as your friend's, especially if he/she had something in writing from the lender denying the government backed SL loan because of a bankruptcy. I see big $$ in that one.