Law Office of Daren A. Webber

In most cases, student loans cannot be forgiven by a bankruptcy. Almost all student loans are federal debts. The only way to have a federal student loan forgiven is if you are permanently disabled. Otherwise, the loan must be repaid.

In almost all cases, you have to fill out the FAFSA or Free Application for Federal Student Aid. A federal student loan cannot be included in a chapter 7 or a chapter 13 bankruptcy. If you are making payments toward your federal student loans and you are filing chapter 13 bankruptcy, the amount that you are repaying is taken into consideration in figuring your payment that you will make to the trustee.

If you are permanently disabled and getting Social Security Disability, you can ask the lender for the paperwork to complete to have your student loans forgiven. This means, because you are disabled, you do not have to repay your loans. The paperwork must be completed and approved by the lender.

It is often the case that your student loans can be placed in deferment so that you do not have to make your payments while you are having financial difficulty. You can also request forbearance due to financial hardship. Ask your lender which you may qualify for. If you are eligible for a forbearance or deferment, the lender can send you the paperwork to sign.

Your bankruptcy attorney should be informed that you have student loans, despite not being able to include them in the bankruptcy. They are a part of your financial situation and your attorney may need to report them during the bankruptcy process. The court does look at your entire financial scenario when they are approving your case.

If you are filing for a chapter 13 bankruptcy, you will be repaying part of your debt to the trustee of the court. The amount that you pay monthly is determined by your income, your secured debts and your financial obligations. If you have a delinquent student loan, you will need to work out payment arrangements with the lender before your bankruptcy is filed so that you can report the payments to your attorney. Otherwise, you may end up paying a higher amount than if it were calculated at the time that your trustee payment is determined.

Bankruptcy may be your best option.