The new COVID-19 law temporarily suspends most, but not all, federal student loan monthly payments, accruing interest, and debt collections. The 880-page Coronavirus Aid, Relief, and Economic Security Act (“CARES”) has 4 pages of help for certain student loan borrowers. Section 3513 of CARES. It provides meaningful albeit temporary help, for those who qualify by having the right kind … Read More
Chapter 7 bankruptcy can temporarily stop student loan collections. Here are several ways it can stop these collections permanently. Bankruptcy gives you tools to deal with special debts—including those you can’t easily write off. Last week we got into income taxes. Today we discuss student loans, focusing on this special kind of debt in Chapter 7 “straight bankruptcy.” Next … Read More
Chapter 7 will stop student loan collections. Then either write off the student loans through “undue hardship” or have time to deal with it. Our last blog post was about a Chapter 7 bankruptcy stopping a tax garnishment only temporarily. In that situation this was OK because it gave time to set up a payment program with the IRS/state. … Read More
To legally write off–discharge–a student loan in bankruptcy takes an extra step: proving that it is causing you “undue hardship.”
Writing off a student loan in bankruptcy requires showing “undue hardship.” What is that?