A student’s loans are in default and can’t get financial aid because of the laws surrounding that, so if they applied for bankruptcy today, how long does it take to complete the process, for example if they started today, how long would it take from today until the process is complete?
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July 18th, 2009 at 4:29 am
Unless something has changed with the new laws regarding bankruptcy, you’ll still have problems getting aid. Federal student loans cannot be included in bankruptcy filing. Private ones may be a different story.
July 19th, 2009 at 9:08 am
You cannot declare student loans (Stafford, Sallie Mae, etc) on your bankruptcy. Chapter 7 bankruptcy laws have changed so it’s not a complete dissolution of debt any more and it’s much harder to qualify for.
Sounds like you need to speak to a bankruptcy lawyer. Most of them will give you a free consultation to discuss your particular situation.
Bankruptcy will stay on your credit for 7-10 years. Bankruptcy processes can take several months to go thru the courts until they are discharged, however, once your bankruptcy is filed (and you have to pay the entire legal fee to do it) you are protected from the creditors on the bankruptcy petition.
You wouldn’t be protected from the student loans. If those student loans are in default, you won’t get anymore financial aid until the payments have been made for 9 consecutive months.
So, that said, bankruptcy still won’t help you as far as getting your student loan out of default thus enabling you to obtain financial aid.
July 22nd, 2009 at 1:59 pm
The process doesn’t take that long, but the student loans will still be in default so it won’t solve the student’s problem.
And please people, stop claiming you don’t get a discharge from bankruptcy, you DO, it’s just SLIGHTLY easier for a credit card company to succeed with a fraud claim. Seriously, if you don’t understand bankruptcy law, do not provide answers about it, it will only cause people to wrongly follow your advice which won’t help them.