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Will filing for bankruptcy stop the feds from trying to collect a past due student loan from 1981 from your 70 yr old dying mother?

Mindee Nelson

in Student Loans

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1 answer

Ashley Howard on November 30, 2019

The answer, Unfortunately, is not. Do not leave a garrison to social security either.

However, what needs to be done, asap, is to apply for a hardship discharge of the loan. If you can prove that repaying the loan would create an undue hardship, and clearly that would be the case here, then she will qualify for a hardship discharge. The test, known as the Brunner Test is 3-pronged, the debtor must prove:

1) That the debtor cannot maintain, based on current income and expenses, a minimal standard of living for the debtor and dependents if forced to repay the student loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loan.

The student loans can't be discharged in bankruptcy - you would have to incur the cost to bring an adversary proceeding to go through the hardship discharge application process during the bankruptcy.

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