Consolidating your loans under chapter 13

The US Bankruptcy Code – specifically section 523(a)(8) – spells out that student loans are exempted from forgiveness in bankruptcy unless it poses “undue hardship.” For most people who are dealing with five digits of student loans, every monthly payment can feel like an undue hardship, but bankruptcy courts have taken a pretty hard line on interpreting this terminology.

But in recent cases, there has been some hope for student loan debtors in bankruptcy rulings.

Bankruptcy schedules are signed under the penalty of perjury and you will be asked under oath at the Meeting of Creditors if all debts were listed. These type of transfers within one year of filing Chapter 7 bankruptcy will almost always be considered fraudulent, and could result in loss of your Chapter 7 discharge.

You could also be subjected to criminal prosecution.

Chapter 7 allows immediate forgiveness of all unsecured debts (except student loans, child support and alimony).

If you are considering filing bankruptcy and think you meet the criteria for student loan discharge in a Chapter 7, you should know that the Harvard law study also revealed that a big factor in success was having a bankruptcy lawyer familiar with adversary proceedings and a track record of winning them.

You should consider bankruptcy if you are under these desperate conditions: or request help now online with a free Debt & Budget Analysis.

Typically, in a Chapter 7 case the debtor loses most of his or her nonexempt assets and receives a Chapter 7 discharge. A credit score will likely be worsened in the short run by filing a Chapter 13.

In a Chapter 13 case, the debtor usually retains his or her nonexempt property, but must pay back as much as the trustee deems feasible for the debtor to pay over 3-5 years. And debtor engaged in business may continue to operate the business during his or her Chapter 13 case. However, if most of a person's debts are ultimately paid off under a Chapter 13 plan, credit reporting agencies will take that into account when determining a credit score. Although, when a Chapter 13 case is filed it becomes public record, the only people that will really know about your filing are your attorney, your creditors, and anyone else who you tell.

Chapter 7 cases take less time and are less expensive than Chapter 13 cases, but Chapter 13 cases allow a debtor who is above the median income or who has a large amount of nonexempt assets to keep their assets and receive the protection of bankruptcy. When is a Chapter 13 more preferable to a Chapter 7? How is Chapter 13 different from a private debt consolidation service? If an objection is filed it must be ruled on by the court in order for the plan to be approved. What is the difference between a secured creditor and an unsecured creditor and how are they treated in Chapter 13? Please see this article about rebuilding after bankruptcy. The public records are not published in the Denver Post, or your local newspapers. How many court appearances is required in a Chapter 13 case?

Chapter 13 is a court protected repayment plan and the courts powers are far beyond those of a private debt consolidation service. Basically, a secured creditor has collateral, where as an unsecured creditor does not have collateral. A couple should file jointly if both spouses are liable for any of the significant debts. Most debtors have to appear in court at least twice, and the attorney will appear with the debtor, then the attorney will make all other appearance.


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