Bankruptcy & Private Student Loans

[Anonymous]

There is an extensive amount of info on the boards. I've looked for an answer to my question to no avail.

I know federally backed student loans can't be charged off thru bankruptcy.  However, my mother co-signed for me and I was laid off and have been struggling.  How is it Sallie Mae can still collect on my mother if she filed bankruptcy?

[laz98]

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@Anonymous wrote:

There is an extensive amount of info on the boards. I've looked for an answer to my question to no avail.

I know federally backed student loans can't be charged off thru bankruptcy.  However, my mother co-signed for me and I was laid off and have been struggling.  How is it Sallie Mae can still collect on my mother if she filed bankruptcy?

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maybe i'm missing something here, but it sounds like you answered your own question.  they cannot be included in your bankruptcy, so the student loans are still collectable.  as a co-signer, she is equally liable for the debt.

[Anonymous]

Thank you for your reply.  The student loan is private and not federally backed.  So, I was wondering about private student loans being charged of via bankruptcy.

Federally backed student loans can't be charged off via bacnkruptcy.  What about non-federally backed student loans, those considered private (which are not federally backed)?

[laz98]

in some instances, they CAN be included, but for the most part, they are treated pretty much the same as federally backed loans.  otherwise, lots of people would probably want to have their student loans discharged that way

did your mother try to have them included?  what was the outcome?

[Anonymous]

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@Anonymous wrote:

Thank you for your reply.  The student loan is private and not federally backed.  So, I was wondering about private student loans being charged of via bankruptcy.

Federally backed student loans can't be charged off via bacnkruptcy.  What about non-federally backed student loans, those considered private (which are not federally backed)?

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While it may seem that private student loans are not federally backed, most of the time they really are.  To encourage lenders to offer private student loans many times the government will back a certain percentage of the loan or offer tax advantages to either the borrower or the lender.  That's probably the main reason why not so long ago the rules on discharge of private student loans in bankruptcy were tightened to include them in the same classification as student loans obtained directly through a government agency.