Discharge Judgment on Student loans

[RyanIsrael]

Can I discharge a judgment against me for private student loans in my chapter 7 bankruptcy? where do i find this policy?
ryan

[KeithDoxen]

No you cannot. Student loan debt is non-dischargeable in bankruptcy.

[justbroke]

Highly unlikely. Student loans are non-dischargeable (with ultra-limited exceptions). Even in the extreme where you can prove that you can't work, ever, you would still need to file a complaint to determine dischargeability of the debt. It's not a policy, but part of the BAPCPA amendments to the Bankruptcy law back in 2005.

11 USC 523 (a)(8)

(8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for—

(A)(i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or
(A)(ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or

(B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;

[AngelinaCatHub]

We had a person living with us and moved out, in not the best of terms. He failed to get his mail changed for four years. So once I noted he had turned 62, I also noted that he had a student loan from years ago. I knew it was very long ago, and I don't think he ever went to class. He just saw a target rife with free money. Within his un-returnable mail he was issued a garnish from a very paltry S.S. fund. THEY will get you right to the death for those loans. I wish they were never invented. 'Hub

[RyanIsrael]

discharge student loan judgment

i understand from all thats written here that student loans are almost impossible to discharge but what happens if the loans have become a judgement? because judgements can be discharged in bankruptcy usually. can i wait for a judgement and then discharge it?

[Peeps]

If that worked, everyone would be doing it.

There really aren't many loopholes that you can use with student loans. They've got the whole thing nailed down pretty tight. You could probably ask for the judgment to be vacated in the BK, but it won't go far. It is still fundamentally a student loan and the judgment won't be vacated unless you successfully go through the process of proving a hardship.

[justbroke]

i understand from all thats written here that student loans are almost impossible to discharge but what happens if the loans have become a judgement? because judgements can be discharged in bankruptcy usually. can i wait for a judgement and then discharge it?

No. It's still a student loan. It is non-dischargeable. (Noting that not all judgments are dischargeable in bankruptcy.)

[RyanIsrael]

No. It's still a student loan. It is non-dischargeable. (Noting that not all judgments are dischargeable in bankruptcy.)

Dear JustBroke,
So not all judgements are discharged in bankruptcy? I thought they were. can you tell me how to find this law that disallows discharge of student loan judgements??? keithdoxen sent me some laws on undue hardship but they dont mention what happens if the student loans are a judgement.
thanks you
ryan Israel

[justbroke]

So not all judgements are discharged in bankruptcy? I thought they were. can you tell me how to find this law that disallows discharge of student loan judgements??? keithdoxen sent me some laws on undue hardship but they dont mention what happens if the student loans are a judgement.

First, a lesson on what a discharge is. A discharge doesn't discharge debt! It only removes your liability to pay that debt; so long as that debt was actually dischargeable or a court specifically ordered a non-dischargeable debt to be discharged (via Motion). The only place in the BK law -- without even looking -- that would allow you to discharge a student loan, is in 11 USC 523. This is the section on dischargeability. By default, all student loans are non-dischargeable, whether they are government or non-government!

The only way to get a discharge for a student loan, would STILL be proving a hardship (period).

A judgment is just an order by the court "reducing" a contract to a money value. Since you didn't pay $XX a month, the judgment reduces it to you now owe $XX,XXX immediately. The judgment can also be "recorded" and attach to all your real and personal property, making it a secured judgment. Secured judgments aren't discharged in bankruptcy. They still attach to property owned before the bankruptcy was filed.

Now, there is a way to get judgments, even secure judgments (or judgment liens), removed in Bankruptcy by filing a Motion to Avoid Secured Lien in the Bankruptcy. However, the parameters for just what can be avoided, is provided in 11 USC 522(f) -- that's from memory, so don't hurt me if I misquoted the paragraph. If the underlying debt was non-dischargeable anyhow, then you can avoid neither the lien nor the judgment.

In the end, the underlying debt is non-dischargeable, so this is really moot as to avoidance.

[HHM]

Sorry Ryan, there is no loophole here. If the underlying debt is non-dischargeable, then so is the judgment.