How does Chapter 7 affect student loans?

Under Chapter 7 bankruptcy, your student loans are not automatically discharged. To have your student loans considered for discharge, you can file a complaint to determine dischargeability, which initiates what’s known as an adversary proceeding. You (and an attorney) attempt to prove your case for financial hardship.

Can bad credit stop you from getting student loans?

Having bad credit won’t disqualify you from getting a student loan. You can borrow federal student loans, which don’t factor in credit history. But, if federal student loans and other aid isn’t enough to pay for college, you may need a private student loan.

Can a student get a federal loan after bankruptcy?

The Bankruptcy Reform Act of 1994 changed the law so that a student who had a federal loan previously discharged in bankruptcy can get a new loan more easily. The one exception to this is the parents PLUS loan.

Can a parent get a PLUS loan if they file bankruptcy?

A PLUS loan is a type of federal loan available to graduate students and parents of dependent undergraduate students. A bankruptcy, or adverse credit history in general, may affect a parent’s chances of obtaining a PLUS loan for their dependent undergraduate student.

Can you go back to school after bankruptcy?

If you are attending school or plan on attending school after filing for bankruptcy, you should consult with lenders and your school’s financial aid department to discuss your options if you are relying on private loans. Private student loans should be taken out only when absolutely necessary and for the minimal amount.

What to do if you have student loan debt?

If your student loan debt is creating a difficult situation for your and your family, you may be able to turn to the bankruptcy courts for help. While discharging student loan debt in bankruptcy is not easy, the courts can provide some help.