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Can you claim student loans on bankruptcy filing?

Kristi Hammond

in Student Loans

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Mindee Nelson on January 7, 2018

A basic, rough primer:. BK is always done under FEDERAL Laws, in a Federal Bankrutpcy Court. Basically State makes little difference. (Yes the BK Courts operating in certain areas have certain special exemptions and such, minor in the overall, generally intended to make things adhere to the local laws and customs better).. In a personal bankruptcy, YOU go bankrupt. Is not a debt, not a loan...not a car...not this or that. ALL of your assets, of all types, MUST be disclosed and reported in BK, and ALL of your liabilities/debts must be too. No exceptions, no picking and choosing. They are all , always involved in some way. . The court will then order each of them in priorities according to the laws. Some things may be exempt from use or discharge (like your personal furniture and retirement accounts are exempt and child support cannot be discharged) and the rest can be used. With one to pay the other. (All possible creditors are contacted and are asked to say what they should be....you may be required to even take out ads to ensure that everyone is notified).. Any deal that I have done for several years is open to scruitiny and review. The court can reverse them, take them out of the BK, or even have been processed as trying to defraud your creditors. (So, no, you can't sell your boat to your brother and then declare BK).. the Debts secured by an asset (e.g. a car) have first call or right to the money received from that asset. If it is not enough to pay the debt, the remainder of the debt becomes a general or unsecured claim against the BK., and has a chance to payment on that level too (albeit a lower priority than those who have still not received anything).. The end/remaining amount that can't be satisfied is generally discharged by the court...which means that you should not. You get a fresh basically debt free start....many of the that you should not get paid what they expected and hoped that, if anything.. There are many other considerations too. BK will severely impair your ability to get credit for a very long time, for example. Is on your credit report for at least 10 years...and employers refer to that, like the owners, and more. Many do not trust people with bankruptcies in their past, especially in recent years. Many more things.. Not disclosing all items is frequently tried and easily discovered, in which case - as you are swearing under oath to the court you included all info - your case is dismissed, and regularly, fraud charges are pursued. (The courts do not take being lied to well).. Many seem to fall into the trap of thinking that you can trick or change or especially shortcut the system, or want to believe what they wrongly understand overrides things (like I don't have to report that asset because it is exempt). It's just not going to happen. . The courts, Judges, laws, bankers, all those zillions of attornies, etc, have been through this thousands of times for many, many years. The processes are fairly well worked through and prepared for the tricks and games. It is unlikely that discover that has not been attempted a million times before! The Cos that claim they can change your record, or make magic happen (either before or after BK), are scams , and getting caught doing something unsavory (intentional or not), other than screwing up your bankruptcy filing, is frequently considered and persued criminally. (Think your financial troubles are bad, try adding in criminal ones). . The legal process and the system of the demand, even for those experienced with it. Many of your creditors will have an attorney to make sure you get as much as possible, even groups of lawyers who specialize only in bankruptcy. Simply you should/better/need to have one also


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