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Student Loan payments during Chapter 7


Student Loan payments during Chapter 7

Should I keep paying student loans while going through a Chapter 7 bankruptcy? I haven't filed yet but my first payment on my student loans is due 3/21/13. I am well aware that these loans will not be discharged with my other debt but will I be required to pay my monthly payments until my bankruptcy finalizes? I don't want to have a bunch of missed payments that will lower my credit score further after my Chapter 7. . .

Message 1 of 12

Re: Student Loan payments during Chapter 7

I have student loans. They were not inclued in BK. You should pay them to keep them current. But check it with you BK attorney.

Message 2 of 12
New Member

Re: Student Loan payments during Chapter 7

PAY THEM!  If you get behind it is really hard to hurts your credit, but it also is a vicious catch 22 if they send you to collections...if that happens you have to make payments to one company for 9 months then another after that, but during the 30-60 days it takes for the transfer paperwork to process between nobody bills you and if you miss that 1-2 payments you have to start all over again...if you are filing bankruptcy you may qualify for an economic hardship different which would buy you 6-12 mos depending on your situation.

Message 3 of 12
Established Contributor

Re: Student Loan payments during Chapter 7

You need to talk to your lawyer. I thought you would have a stay on your student loans until your BK is discharged.

Message 4 of 12

Re: Student Loan payments during Chapter 7

How long does it generally take for the hold to be placed? My 1st payment is due next month and I hope to have my BK7 filed in the next 7 days. I'm supposed to meet with my attorney this week. . .

Message 5 of 12
Valued Member

Re: Student Loan payments during Chapter 7

My wife has a Direct federal student loan that has been in default since 2009 about. She is disabled on SSD and is on welfare and medicare.I used to get SSI but they cut my check off when my wife got hers so legally half of her $1269 check is mine lawyers told me. We are currently paying them $10.00 a month when they only wanted $5.00 a month through a collection agency of theirs for 9 months then it comes out of default status. Then theis guy I don't know if he was lying or not but he said we would have to fill out a financial statement and tell them nothing has changed when the 9 months is up under the income payment based program this was a parent student loan for her daughter room and board. There is no way we could ever afford $300 a month on a $27,000 loan. The original loan amount was only $13,000 it doubled in size because of default and forebared so many times. My wife is mentally ill and I'm worried they will try something if they refuse to honor this supposed income based repayment plan. As far as I know this check is part SSI welfare since welfare pays her medicare part B and we get the check on the 3rd of every month when checks including SSI are included normally Social Security goes by DOB for people after 1997. My wife is just turning 50. Her Doctor may sign one of those discharge of debt forms but I guess we cannot could eggs before they hatch. My bankruptcy lawyer I used in 2009 with a bankruptcy chapter 7 no lawyer would touch my case because of business credit cards because it involved those but this one lawyer took it all on over $100k in debt gone no assets. This bankruptcy lawyer says she can help my wife with this bankruptcy I told her how comlicated it is I already know student loans are almost impossible to get discharged unless you can prove "undue hardship". Well we only get a little over $15k a year and with all the expenses we have and my wifes mental condition and being there is 2 people living on her check part SSI I don't believe they can legally touch my wife's check but anyways if not this lawyer says she can definately help me and my wife with this student loan in a bankruptcy and prove undue hardship she was attacked with a knife in 2011 and her mental state isn't very good. I told her all about this how it gets her so upset we could lose our home if the garnish up to 15% of her tiny check if I got my full SSI check it wouldn't hurt us real bad but I get nothing and we both qualify for welfare whcih I'm not proud of after owning a business but I'm disabled as well mentally and this stress is eating me and her alive. She got all my stuff discharged but I ask myself in even with these special conditions that could possibly prove undue hardship for possible chapter 7 discharge that must be her motivation she is the very best or maybe some kind of deal could be made in bankruptcy court if undue hardship couldn't be obtained? This is only if the US dept of education doesn't let her stay on this income based pay of $10 a month... On our income we qualify through this collection agency and he said her credit would be improved and no more defaults or negative marks on her credit. I just hope I wasn't lied to and have to pursue this course of action my wife doesn't need this stress of having to deal with it and no her daughter didn't co-sign this loan it was for her though. This lawyer isn't cheap either I got her through legal aid last time but I don't think this case would be through legal aid she would want a ton of money and it would take forever to pay her we are so much in the whole every month. I couldn't imagine this student loan place doing this to us making us lose our home and out on the street... The collection guy couldn't give it to me in writing that we would qualify in 9 months after its out of default but he was checking for 20 minutes on the phone to see if it was even able to be put into this program and it was and he must have been talking to US Dept of Education he knew all their rules etc. I told him my wife was through so much and this check was part SSI and we could never afford $300 monthly payments yikes. If we are not undue hardhship I would hate to see what real undue hardship was. 

Starting Score: TU:599 EXP: 596 EQ: 595 Starting Year 2009
Current Score: TU:715 (685 FAKO) EXP:647 (673 FAKO) EQX: 637 (FAKO 615) - All on 04/24/13 In the garden until 05/2014 because too many inq and low AAoA 1.4 mo. My BK chap 7 will be 4 yrs old July 2013
Goal Score: 760+ across the board by next year July 2014 5 yrs after BK

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Message 6 of 12
Senior Contributor

Re: Student Loan payments during Chapter 7

IMO you should make the payments on your student loans on time - every time.  I had student loans when I filed  BK7, and I believe making all my payments on time is what helped my scores recover to a good level relatively quickly. 


If you miss payments while going through BK or after it will tell lenders that your habits haven't changed.  That's not the message you want to send.  Prove that you are behaving responsibly and you will be rewarded.


Good luck!

Message 7 of 12

Re: Student Loan payments during Chapter 7

I was going to pay 6 months in advance next week. I have read some posts from other users that they were unable to make their payments after filing and that after discharge they weren't notified when they were supposed to resume paying. The total of all my student loans combined is about $150.00 a month. I called to ask if a lump sum payment would count as 1 payment or the total would be spread out over multiple payments and the Customer Service Rep really couldn't answer that question. Hopefully when my payment posts I can check online to get the due date for the next payment.

Message 8 of 12

Re: Student Loan payments during Chapter 7

I had my meeting of the creditors on 4/30/13, and now my loans are being reported as zero balance. Is this only temporary until I receive discharge?

Message 9 of 12
Established Member

Re: Student Loan payments during Chapter 7

My experience:


I have federal student loans, a perkins loan and a private student loan (AES). My lawyer told me we had a 30 day "grace period" from the day we filed bankruptcy (NOT discharged). After 30 days the students loans still cannot bill you or attempt to collect the debt but they can still show payments due, late, etc. I would continue to pay your student loans regularly.  They can start billing you, attempting to collect, etc. after discharge.


All of my student loans reflect a $0 balance since I filed BK.

Message 10 of 12