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7s and Private Student Loans

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    7s and Private Student Loans

    After yet another dog emergency, and doing my taxes (where I owe the feds) I am convinced that biting the bullet and going for the 7 is in my best interest. I failed the means test on NOLO but I am a disabled (enough) veteran with debt that was about 95 percent stacked up on active duty. This means I don't have to worry about taking the means test. Next step is hiring attorneys.

    I do plan on keeping the car as I will have more than enough money to finish paying it off. One point of contention I have is witha private student loan that will never be paid off at this point. I owe a government backed SL which won't be discharged. However, this private one is not guaranteed by anyone and was used to consolidate CCs used for tuition back in 1999-2000. After ten years it is maybe 25 percent less than I borrowed. I had heard that the 2005 BK laws have changed the rules on private loans and made them non dischargeable. Does anyone have experience in this area?
    First consult: You go now, no CH 7 for you. You spent entire buffet. 13 has a 95 percent payback. (Owwwch) On to next consult....

    #2
    If the loan is a personal loan/signature loan, it's dischargebable. I do believe that any other form of education loan (i.e. Sallie Mae or government backed SL) may not be discharged.
    Bankruptcy History:
    Chapter 7 filed - 10/12/2005 - Asset
    Discharged - 02/16/2006
    Case Closed - 11/08/2007

    A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain ~ Mark Twain

    All suggestions are based on personal experience and research and SHOULD NOT be construed as legal advice as I am NOT an attorney. Always consult with competent counsel in your area with regards to your particular situation.

    Comment


      #3
      It was definitely not government backed; don't think it was a Sallie Mae as far as I can recall. I did not need financial aid paperwork...just proof that I was in school.
      First consult: You go now, no CH 7 for you. You spent entire buffet. 13 has a 95 percent payback. (Owwwch) On to next consult....

      Comment


        #4
        It doesn't matter the use to which the money was put nor does it matter the source of the funds (government vs private). What matters is the type of loan it was. Bassboy is correct insofar as that personal loans are not covered. He's wrong insofar as it has to be "government backed".

        Proof you were in school does not decide the matter. Read the paperwork on the loan. Is it called a student loan? There is a difference between a student loan and a loan to a student. Sometimes it's not a student loan but the lender wants proof you are in school in lieu of a work history.
        So the poor debtor, seeing naught around him
        Yet feels the narrow limits that impound him
        Grieves at his debt and studies to evade it
        And finds at last he might as well have paid it.

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          #5
          I get deductible interest so it is a student loan as personals are not deductible. I was fairly certain that at one time private loans not government backed were dischargeable, but the new laws changed this for nearly all SLs regardless of guarantee.

          I guess I am most likely stuck with it (and its God-awful variable rates) if I do file.
          First consult: You go now, no CH 7 for you. You spent entire buffet. 13 has a 95 percent payback. (Owwwch) On to next consult....

          Comment


            #6
            Took a gander at my old paperwork and wonder WTF I was thinking when I signed off on this thing in '99. 12.9 variable, borrowed 29K, bank added 3K for origination and payback would result in my paying somewhere around 90K.

            Does not say specifically that it was a student loan, and it had changed banks since I opened it.
            First consult: You go now, no CH 7 for you. You spent entire buffet. 13 has a 95 percent payback. (Owwwch) On to next consult....

            Comment

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