In “Student Loans and Bankruptcy in Oklahoma” I discussed how the current bankruptcy laws require you to prove “undue hardship” in order to discharge or wipe-out your student loan. If you are unable to prove undue hardship, filing Chapter 13 bankruptcy may still be helpful to you.
One benefit to you is that in a Chapter 13 bankruptcy which is a repayment plan, you pay what you can afford to pay on your unsecured debts including your student loan, not what your loan company says you have to pay.
Another benefit to you is that while you are in the Chapter 13 repayment plan, the student loan creditor must stop all collection activity including telephone calls, letters, lawsuits, wage garnishments, and tax refund intercepts.
The Chapter 13 repayment plan will last from 3 to 5 years. At the end of that time, if you have not paid your student loan in full, you will still owe the remaining balance. However, you simply go back to making your monthly payments directly to the student loan company. This will likely be much easier for you since you will not have remaining balances on most other unsecured debts such as credit cards and medical bills which are wiped-out completely in the Order of Discharge you will receive at the end of the Chapter 13 plan.
If you are struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.
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Hello,
I am writting this to you due to having a large debt from student loans, the school I attended closed down while I was on a leave of absense.
I missed out on a class action lawsuit due to being in another state. By the time I heared of this it was too late for me to be included. Several of the students filed a suit and thier loans were dismissed.
I was only given two disbursments one of about 300.00 and another about 450.00. My question is what are my options?
Thank You,
Dee Anne Branson
Dee Anne,
Generally, a person who received a student loan at a school that closed before he/she completed studies may be eligible for discharge of the loan. A federal student loan can be discharged for school closure if a person was enrolled when the school closed and could not complete the program of study because of the closure. If a person was on an approved leave of absence, he/she is considered to have been enrolled at the school.
You can obtain the application for loan discharge due to school closure from the Oklahoma Guaranteed Student Loan Program’s web site http://www.ogslp.org/Students/loan-discharge.shtml.