Important article about student loan debt (CNN)

[EmsMom]

I was just reading this article on student loan debt on the CNN website. According to the article, student loan debt can be discharged (although difficult). Since the common assumption everywhere, including this board, is that it can be discharged/forgiven even in the case of bankruptcy, I think that this is important information to have.

http://money.cnn.com/2008/10/23/pf/c...ex.htm?cnn=yes

Quote: "While getting student loans discharged through bankruptcy is no easy task, that doesn't mean it can't be done.

"There's a mythology that private student loans can't be discharged. But sometimes they can and should," says Kantrowitz.

To get your student loans discharged, you must file an undue hardship petition. To qualify, you have to satisfy three conditions: First, you must not be able to repay your student loan and also maintain a minimal standard of living based on your income and your expenses. Second, your situation must likely persist for a significant portion of the repayment period of the loan. Finally, you must have made good faith efforts to repay the loans.

In about half of cases of people who do file for this hardship petition, debt will be partially or totally discharged, says Kantrowitz."


Hoping that it gives a glimmer of hope to at least one person here....

[Natsuki]

I think the key phrase there is *private* student loans.

[Belleweather]

My understanding is that although it's technically possible, it's hella, hella unlikely in practice.

When we were studying the issue in my bankruptcy law class we read an opinion that a partially disabled borrower who was living a subsistence lifestyle couldn't discharge his loans because he had a cat and could afford litter and cat food and therefore was able to maintain a minimal standard of living with enough left over to have the "luxury" of a pet.

[shayinme]

Originally Posted by Belleweather

My understanding is that although it's technically possible, it's hella, hella unlikely in practice. When we were studying the issue in my bankruptcy law class we read an opinion that a partially disabled borrower who was living a subsistence lifestyle couldn't discharge his loans because he had a cat and could afford litter and cat food and therefore was able to maintain a minimal standard of living with enough left over to have the "luxury" of a pet.

Its also been my understanding as well that getting your loans discharged only happens under the most extreme circumtances, like you won't ever have the ability to work.

Shay