Can My Student Loan Be Included In My Bankruptcy?
Yes, But With Exceptions
You should know all the specific details about including student loan in bankruptcy as ignorance will not be a bliss in this case. First and foremost, you cannot include student loan in bankruptcy just to evade repaying. There are certain terms and clauses in law which lists out the situations where you can claim a student loan on bankruptcy. If your case falls under any of the below mentioned criteria then you can include student loan in bankruptcy.
Case 1: Affected by closed or fraudulent education institutes
Though self-explanatory, here are few more details about this case. The university, school, or college you attended may have lied about their accreditation status or absorbed under-qualified students into higher education courses.
In addition to this, if a student has not received the GED or high school diploma then he/she cannot be benefitted by the higher education. In this case, there are possibilities for including the student loan in bankruptcy and get a positive result.
Case 2: Having physical disability
You can include student loan in bankruptcy if you can prove with credible medical proofs that you are seriously or permanently disabled to repay your student loans. The final decision is taken by a bankruptcy judge who will evaluate the severity of your disability and discharge the student loan if the need be. It is to be noted that disabilities such as mental illness or back pain will not considered valid.
Case 3: Private loans
Apart from the above mentioned cases, if you have availed private student loans such as the ones loaned by credit unions, finance companies, or banks then you can include your student loan in bankruptcy as it are not backed by Federal Government and hence is dischargeable.
Thus, you have to understand that not all student loans can be included when filing bankruptcy as per the laws mentioned in Chapter 7 bankruptcy case. By understanding the cases where including student loan in bankruptcy is possible, you can make enjoy the maximum benefits if you are eligible for nullifying your student loans.
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