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Life After Bankruptcy: What You May Expect After Filing, loans after bankruptcy.#Loans #after #bankruptcy


After Bankruptcy

The truth is that bankruptcy laws were created to help consumers. After filing bankruptcy, you will likely feel relieved.

However, many people who are thinking about filing are worried about what happens AFTER they file. They’ve heard all kinds of rumors, such as, “You can’t get credit for ten years after bankruptcy.” This is WRONG.

Loans after bankruptcy

What Happens After Bankruptcy?

Shortly after filing bankruptcy, your credit may not be strong. However, your credit was likely not strong when you were dealing with the circumstances that resulted in your bankruptcy filing.

Here’s what you can realistically expect after your bankruptcy discharge:

  • Unscrupulous creditors will likely flood you with offers of low-balance credit cards to help you “rebuild” your credit after bankruptcy. Unfortunately, many of these offers come with activation fees and membership fees that could push you near your credit limit before you’ve ever used the card. And then late charges and over-the-limit fees will kick in, putting you right back where you started: in debt and with late payments on your credit. So what can you do? Choose your new credit accounts with care. There are reputable lenders who will give you a chance to re-establish credit after bankruptcy. Don’t get so eager that you abandon your better judgment.
  • After bankruptcy, you won’t immediately be able to qualify for most conventional mortgages, car loans and the like (learn more about cars in bankruptcy so you know what you may expect when you file). For most people who file bankruptcy and then pay their bills on time, however, those loans will be within reach 2-3 years after discharge. So while bankruptcy won’t be a quick fix for helping you get a new, big loan it can help you achieve good credit standing in a fairly short period of time.

    The bottom line is that if you’re like most bankruptcy petitioners, not much will change right after your discharge–other than your eligible debts being gone.

    Discuss Life After Filing Bankruptcy with a Bankruptcy Lawyer

    Your credit was probably weak before you filed bankruptcy and it will be weak immediately after. Without those old debts hanging over your head, though, you’ll have the opportunity to start to rebuild your credit.

    In time, if you handle those early accounts carefully, your credit can be stronger than it was before you filed and you’ll begin to see not only more credit available, but lower interest rates and more favorable terms.

    If you have more questions about life after bankruptcy, a bankruptcy lawyer may be able to answer them. Click below to connect to a lawyer for free.

    Loans after bankruptcy


Student Loan Bankruptcy, loans after bankruptcy.#Loans #after #bankruptcy


Bankruptcy

Loans after bankruptcy

Student loans are difficult, but not impossible, to discharge in bankruptcy. To do so, you must show that payment of the debt “will impose an undue hardship on you and your dependents.”

Courts use different tests to evaluate whether a particular borrower has shown an undue hardship.

Loans after bankruptcy

The most common test is the Brunner test which requires a showing that 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) 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) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987). Most, but not all, courts use this test. A lot has changed since this 1987 court decision and some courts have begun to question whether they should use a different standard. For now, all federal courts of appeal except the First and Eighth Circuits have adopted the Brunner test.

If you can successfully prove undue hardship, your student loan will be completely canceled. Filing for bankruptcy also automatically protects you from collection actions on all of your debts, at least until the bankruptcy case is resolved or until the creditor gets permission from the court to start collecting again.

Assuming you can discharge your student loan debt by proving hardship, bankruptcy may be a good option for you. It is a good idea to first consult with a lawyer or other professional to understand other pros and cons associated with bankruptcy. For example, a bankruptcy can remain part of your credit history for ten years. There are costs associated with filing for bankruptcy as well as a number of procedural hurdles. There are also limits on how often you can file for bankruptcy.

How to Discharge Student Loans in Bankruptcy

Whether a student loan is discharged based on hardship is not automatically determined in the bankruptcy process. You must file a petition (called an adversary proceeding) to get a determination. This sample gives you an idea of what your complaint should look like.

If you already filed for bankruptcy, but did not request a determination of undue hardship, you may reopen your bankruptcy case at any time in order to file this proceeding. You should be able to do this without payment of an additional filing fee. Chapter 11 of NCLC’s Student Loan Law publication includes extensive information about discharging student loans in bankruptcy.

It is up to the court to decide whether you meet the “undue hardship” standard. Here are a few examples of successful and unsuccessful cases.

  1. A 50 year old student loan borrower earning about $8.50/hour as a telemarketer was granted a discharge. The court agreed that the borrower had reached maximum earning capacity, did not earn enough to pay the loans and support minimal family expenses and appeared trapped in a cycle of poverty.
  2. A college-educated married couple proved undue hardship and were able to discharge their loans. They both worked, but had income barely above poverty level. The court noted that the borrowers worked in worthwhile, although low-paying careers. One worked as a teacher’s aide and the other as a teacher working with emotionally disturbed children. Even with a very frugal budget, they had $400 more a month in expenses than income. Their expenses included $100 monthly tuition to send their daughter to private school. Relatives paid for most of this and the couple testified that they objected to the public school’s corporeal punishment policy. In agreeing to discharge the loans, the court also found that the couple had acted in good faith because they asked about the possibility of a more affordable repayment plan. Not all courts are as sympathetic to borrowers who work in low-paying careers. For example, one borrower was denied a discharge because he worked as a cellist for an orchestra and taught music part-time. The court suggested that this borrower could find higher-paying work. Another court came up with the same result for a pastor. The court found that it was the borrower’s choice to work as a pastor for a start-up church rather than try to find a higher paying job.
  3. A number of courts have granted discharges in cases where the borrower did not benefit from the education or went to a fraudulent school.
  4. There have been mixed results when borrowers have tried to show that their financial difficulties will persist into the future. For example, one court found that a borrower’s alcoholism was not an insurmountable problem, but some borrowers have won these cases. In one case, a borrower’s testimony about her mental impairment, including evidence that she received Social Security benefits, was enough to convince the court of undue hardship. The court agreed with the borrower that her ongoing mental illness was likely to continue to interfere with her ability to work.
  5. In finding undue hardship in a 2011 case, the judge found that a 58 year old and 60 year old couple s past employment experience showed no likelihood that their financial circumstances would change for the better before they reached retirement age. The judge also considered accrued post-bankruptcy medical expenses in the amount of $22,000. There was nothing in the record to suggest that the medical debt would be forgiven. Both borrowers suffered from various medical ailments. Although there was no medical expert testimony of disability, the borrower s own testimony was sufficient to who that their health problems limited future employment prospects.
  6. Most courts have found that borrowers do not have to be at poverty level income to prove undue hardship. A 2014 court described a minimal standard of living as somewhere between poverty and mere difficult.
  7. Many courts give a lot of weight to the availability of income-based repayment plans, but all courts so far agree that a borrower does not have to participate in an income-based plan in order to meet the undue hardship standard. Borrowers should be prepared to argue that income-based repayment plans do not provide the same type of comprehensive relief as a bankruptcy discharge.

Even if you cannot prove undue hardship, you still might want to consider repaying your student loans through a Chapter 13 bankruptcy plan.

CHAPTER 13 and STUDENT LOANS

A case under chapter 13 is often called “reorganization.” In a chapter 13 case, you submit a plan to repay your creditors over time, usually from future income. These plans allow you to get caught up on mortgages or car loans and other secured debts. If you cannot discharge your student loans based on undue hardship in either a chapter 7 or chapter 13 bankruptcy, there are still certain advantages to filing a chapter 13 bankruptcy. One advantage is that your chapter 13 plan, not your loan holder will determine the size of your student loan payments. You will make these court-determined payments while you are in the Chapter 13 plan, usually for three to five years. You will still owe the remainder of your student loans when you come out of bankruptcy, but you can try at this point to discharge the remainder based on undue hardship. While you are repaying through the bankruptcy court, there will be no collection actions taken against you. You may have other options, depending on how judges decide these cases in your judicial district. For example, some judges allow student loan borrowers to give priority to their student loans during the Chapter 13 plan. You should discuss these options with a bankruptcy attorney.

The Resources section has more information about finding a lawyer to help you. When shopping around for a lawyer, make sure that you let the lawyer know that you want to discharge your student loans in bankruptcy. You should ask a lot of questions to see if the lawyer understands this process. It is not as straightforward as filing a regular Chapter 7 bankruptcy petition. You should assume the lawyer is not knowledgeable in this area if he tells you that student loans cannot be discharged in bankruptcy. The truth is that you can discharge your student loans if you can prove undue hardship. You should always have an opportunity to talk to a lawyer before you pay anything. Make sure you have a clear idea of what the lawyer will do for you and what you will be charged.

Loans after bankruptcy


Life After Bankruptcy: What You May Expect After Filing, loans after bankruptcy.#Loans #after #bankruptcy


After Bankruptcy

The truth is that bankruptcy laws were created to help consumers. After filing bankruptcy, you will likely feel relieved.

However, many people who are thinking about filing are worried about what happens AFTER they file. They’ve heard all kinds of rumors, such as, “You can’t get credit for ten years after bankruptcy.” This is WRONG.

Loans after bankruptcy

What Happens After Bankruptcy?

Shortly after filing bankruptcy, your credit may not be strong. However, your credit was likely not strong when you were dealing with the circumstances that resulted in your bankruptcy filing.

Here’s what you can realistically expect after your bankruptcy discharge:

  • Unscrupulous creditors will likely flood you with offers of low-balance credit cards to help you “rebuild” your credit after bankruptcy. Unfortunately, many of these offers come with activation fees and membership fees that could push you near your credit limit before you’ve ever used the card. And then late charges and over-the-limit fees will kick in, putting you right back where you started: in debt and with late payments on your credit. So what can you do? Choose your new credit accounts with care. There are reputable lenders who will give you a chance to re-establish credit after bankruptcy. Don’t get so eager that you abandon your better judgment.
  • After bankruptcy, you won’t immediately be able to qualify for most conventional mortgages, car loans and the like (learn more about cars in bankruptcy so you know what you may expect when you file). For most people who file bankruptcy and then pay their bills on time, however, those loans will be within reach 2-3 years after discharge. So while bankruptcy won’t be a quick fix for helping you get a new, big loan it can help you achieve good credit standing in a fairly short period of time.

    The bottom line is that if you’re like most bankruptcy petitioners, not much will change right after your discharge–other than your eligible debts being gone.

    Discuss Life After Filing Bankruptcy with a Bankruptcy Lawyer

    Your credit was probably weak before you filed bankruptcy and it will be weak immediately after. Without those old debts hanging over your head, though, you’ll have the opportunity to start to rebuild your credit.

    In time, if you handle those early accounts carefully, your credit can be stronger than it was before you filed and you’ll begin to see not only more credit available, but lower interest rates and more favorable terms.

    If you have more questions about life after bankruptcy, a bankruptcy lawyer may be able to answer them. Click below to connect to a lawyer for free.

    Loans after bankruptcy


How to Buy a Home After Filing Bankruptcy: 9 Steps (with Pictures), loans after bankruptcy.#Loans #after #bankruptcy


How to Buy a Home After Filing Bankruptcy

Filing for bankruptcy is not an easy decision. However, mounting debt can be both crippling and so stressful that you feel like you will never recover. But, you will. With the clean slate of bankruptcy, you can rebuild your credit and be ready to purchase a home in a shorter time than you might think.

Steps Edit

Part One of Two:

Creating Your Home Buying Plan After a Bankruptcy Edit

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Part Two of Two:

Applying for a Mortgage After Filing Bankruptcy Edit

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy


Student Loans in Chapter 13 Bankruptcy, bankruptcy auto loans.#Bankruptcy #auto #loans


Student Loans in Chapter 13 Bankruptcy

Except in rare circumstances, student loans cannot be discharged in bankruptcy. But if you are struggling to make your student loan payments, filing for Chapter 13 bankruptcy can allow you to delay or reduce your monthly obligations. Read on to learn more about how Chapter 13 bankruptcy can help you manage your student loan debt.

Your bankruptcy discharge does not wipe out certain types of debt. These are referred to as nondischargeable debts. Unfortunately, student loans are one of them.

Generally, the only way to discharge student loans through bankruptcy is to prove that paying them back is an undue hardship for you. This is extremely difficult to prove and is usually only granted in rare circumstances (such as severe disability). As a result, in almost all cases, you will still be required to pay back your student loans after receiving a bankruptcy discharge.

(To learn more about the undue hardship test for student loans in bankruptcy, see Student Loan Debt in Bankruptcy.)

Student Loans Are Treated As Nonpriority Unsecured Debts in Chapter 13 Bankruptcy

In Chapter 13 bankruptcy, student loans are treated as nonpriority unsecured debts just like credit cards and medical bills. This means that you are not required to pay them off in full through your Chapter 13 repayment plan. Student loans receive a pro-rata share of the total amount paid to unsecured creditors in your plan (this amount depends on your income and expenses). As a result, Chapter 13 bankruptcy can help delay or reduce your monthly student loan obligations during the life of your bankruptcy (discussed below). However, once your Chapter 13 bankruptcy is over, you must continue to pay your student loans.

Under certain circumstances, you may also be able to continue making student loan payments outside of bankruptcy. However, whether you can do this depends on where you live. Most jurisdictions do not allow debtors to pay student loans outside of bankruptcy because they believe it unfairly discriminates against other unsecured creditors by reducing the amount they get paid through the bankruptcy.

How Chapter 13 Bankruptcy Can Help You Manage Your Student Loan Obligations

Even though student loans are not dischargeable in bankruptcy, filing for Chapter 13 can help you delay and manage your monthly obligations. The following are some of the ways Chapter 13 bankruptcy can help you.

The Automatic Stay Prohibits Student Loan Collection

When you file for Chapter 13 bankruptcy, an automatic stay goes into effect that prohibits almost all creditors (including student loan lenders) from trying to collect their debts. This means that Chapter 13 bankruptcy can stop your student loan company from harassing you during your bankruptcy (which can last as long as five years). (Learn more about bankruptcy’s automatic stay.)

Chapter 13 Bankruptcy Can Delay Student Loan Payments

Since you are protected by the automatic stay, you do not have to make regular student loan payments during Chapter 13 bankruptcy. Your student loans will be paid through your Chapter 13 payments according to the terms of your plan. If you have little or no disposable income, you may not have to pay anything towards your student loans in your repayment plan. However, keep in mind that interest will continue to accrue on your student loans during bankruptcy and you will still be required to pay them back after your case is closed. (Learn more about how payments are determined in Chapter 13 bankruptcy.)

Chapter 13 Bankruptcy Can Reduce Your Monthly Obligations

You can still pay back a portion of your student loans through your Chapter 13 plan. The benefit of Chapter 13 bankruptcy is that you only pay back what you can afford. If you cannot afford your regular student loan payments, you can lower your monthly obligations by paying a smaller amount through your Chapter 13 plan. Since Chapter 13 bankruptcies can last as long as five years, this can allow you time to increase your income and more easily afford your payments after bankruptcy.

For nonbankruptcy methods of dealing with student loan payments (including consolidation, forbearance, and reasonable and affordable payment plans), see our Student Loan Debt topic.


How to Buy a Home After Filing Bankruptcy: 9 Steps (with Pictures), loans after bankruptcy.#Loans #after #bankruptcy


How to Buy a Home After Filing Bankruptcy

Filing for bankruptcy is not an easy decision. However, mounting debt can be both crippling and so stressful that you feel like you will never recover. But, you will. With the clean slate of bankruptcy, you can rebuild your credit and be ready to purchase a home in a shorter time than you might think.

Steps Edit

Part One of Two:

Creating Your Home Buying Plan After a Bankruptcy Edit

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Part Two of Two:

Applying for a Mortgage After Filing Bankruptcy Edit

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy


How To Buy a Car After Bankruptcy, loans after bankruptcy.#Loans #after #bankruptcy


How To Buy a Car After Bankruptcy

Shop Carefully for a Car Loan With a Fair Interest Rate

08/20/2013 – By Susan Ladika

Loans after bankruptcy

Loans after bankruptcy

Loans after bankruptcy

Even if your finances have hit the skids and you’ve landed in bankruptcy court, it doesn’t have to mean you need to put the brakes on buying a car.

“Lenders lend to people in bankruptcy all the time,” though interest rates could be sky high, says Edward Boltz, a bankruptcy attorney in Durham, North Carolina, and president of the National Association of Consumer Bankruptcy Attorneys.

The key to buying a car after a bankruptcy, experts say, is to shop around for an auto loan, just as you would if you didn’t have that black mark on your credit report.

When you’re just emerging from bankruptcy, “you’re likely to agree with just about anything they’ll give you. But you shouldn’t just take the first offer you get,” warns Chris Kukla, senior vice president at the nonprofit Center for Responsible Lending.

A study by the center found that in 2009, consumers paid $25.8 billion in extra interest over the lives of their loans due to inflated interest rates, according to Kukla. Those who paid exorbitant interest rates were more likely to fall behind on their loans and eventually have their cars repossessed.

But your situation doesn’t have to be that grim. If you’ve had a good track record paying previous car loans or your financial issues stemmed from uncontrollable events, you may very well be able to finance your vehicle through a lender such as a credit union, says Phil Maniaci, senior vice president of CU Direct Corp.’s CUDL Automotive, which administers the largest auto lending service network for credit unions.

Unlike megabanks, credit unions are generally located in the communities that they serve, so those managers understand the vagaries of the local economy, such as a city where a major factory closed, leaving workers unemployed, Maniaci says. Because of that familiarity, “they’re a little more flexible on auto loans.”

Bankruptcy has often been seen as a tactic of those who are financially irresponsible, but unforeseen hardships such as medical bills and divorce often drive people into bankruptcy court.

The situation has been exacerbated by the Great Recession, when unemployment peaked at 10 percent in October 2009. Although the rate had dropped to 7.6 percent in the summer of 2013, many people have wound up in jobs making far less than they once earned. And it’s not unusual for people to be out of work for a year or more.

The recession officially began in December 2007, and since that time, more than 7 million consumer bankruptcies have been filed, according to the American Bankruptcy Institute. Some cases involve a single individual, while others involve couples.

Chapter 7 and Chapter 13

About 70 percent of those who file bankruptcy choose Chapter 7, so most of their debts are erased in a matter of months, but it can stay on their records for up to 10 years.

Most others opt for Chapter 13 in a bid to save their assets. They wind up paying all or part of their debts, and the process can take up to five years. And even when they’ve completed the process, it can stay on their records for up to seven years.

Because Chapter 13 cases can take so long, it’s not unusual for the person involved to need a new car during that time. And the bankruptcy trustees who oversee cases understand that.

“It’s really not hard to get new debt, particularly if you need it,” says Henry Hildebrand III, a Chapter 13 bankruptcy trustee in Nashville, Tennessee. As a bankruptcy trustee, he must approve auto loans or other new debt a consumer wants to take on while in the midst of bankruptcy proceedings.

Although a trustee is likely to approve your getting a new auto loan, don’t expect him to sign off on a new Mercedes or Jaguar. You’re more likely to get the green light to buy a used vehicle below a certain price, such as $20,000, and the maximum interest rate could be capped at rates such as 15 or 18 percent.

That’s far steeper than someone with stellar credit would pay, says Todd Mark, vice president of education for the nonprofit Consumer Credit Counseling Services of Greater Dallas, citing interest rates listed by FICO, which is best known for assigning credit scores.

FICO scores range from a low of 300 to a high of 850. As of mid-June 2013, someone with a credit score of 720 or higher would typically pay around 3.80 APR for a 36-month car loan. At the lower end of the spectrum, someone with a credit score of 500-589 would expect to pay about 17.02 APR, Mark says.

The longer you’ve been out of bankruptcy, and the more you’ve been able to put your financial house in order, the better chance you have of landing a decent interest rate, Mark says. “There’s more time to heal some of the wounds, not just with time but with good behavior” in paying other debt.

Because your vehicle serves as collateral for the loan, “a car loan might be one of the best credit builders post-bankruptcy,” Mark says.

Maniaci says if you’re applying for an auto loan, lenders focus on your history of making car payments and mortgage payments. Your track record for paying on your current vehicle carries the most weight. Lenders’ focus on mortgage payments has slipped a bit in recent years, given the foreclosure crisis and the fact that so many houses are underwater.

Lenders will look at whether you’ve missed a payment or two on your current car loan and are now back on track, and if an uncontrollable incident, such as a job loss, impacted your finances, he says. They’ll also consider your income and monthly expenses. If making the monthly payment is considered a financial stretch, they’ll want you to put more money down on the vehicle, minimizing their risk if they ultimately have to repossess it.

If you’re an existing credit union member and you’ve been reliable making payments in the past, there’s a good shot the credit union will give you a second chance, Maniaci adds.

While it may take time and effort to find a credit union or bank that will lend to you, “just because you have a blemish on your credit report doesn’t mean you can’t get credit somewhere,” Kukla says.

The Trouble with “Buy Here Pay Here”

But consumers don’t like hearing “no,” and feeling like they’re being judged, he says, so they may be inclined to take the first offer they receive. That’s thrown open the doors for “buy here, pay here” auto dealers, where shoppers arrange financing and make payments at the dealership. These dealers, in particular, can be “very aggressive in marketing to people with credit problems,” Kukla says. But that could be disastrous.

Katie Moore, a financial counselor with the nonprofit GreenPath Debt Solutions, says dealers who offer to sell cars with no credit check and no money down “are really preying on consumers who are uneducated about the process.”

They’re likely to offer sky-high interest rates and lengthy loan terms on older vehicles in order to keep the monthly payments low. But it’s not uncommon for the car to break down, while the buyer is still paying on the loan, Moore says.

Kukla says these kinds of dealerships tend to sell vehicles that have 100,000 miles or more on their odometers. The dealerships typically buy the cars at auction, put a bit of money into them and then sell them for two to three times more than their cost.

The dealers then require a down payment of 25-30 percent of the price. “It’s a huge down payment on a very unreliable car,” Kukla says.

The dealerships also charge interest rates at the high end of what is allowed in whatever state they’re doing business. Each state sets its own interest rate limit. In North Carolina, where Kukla is located, interest rates can reach 29 percent.

And in many cases, dealers won’t even tell you the car’s price, he says. “Most don’t set the price until after they look at your credit report,” Kukla says. Once they do, they’ll offer you two or three vehicles to choose among.

Kukla says about one-quarter of those vehicles end up being repossessed, and then can be sold to the next buyer facing a credit crunch.

To avoid being taken for a ride, Moore recommends that if you’re coming out of bankruptcy, you use public transportation if you can’t afford to pay cash for a vehicle.

Some other ideas come from the National Independent Automobile Dealers Association (NIADA), which includes “Buy Here, Pay Here” dealers among its members. Check with your state attorney general’s office and the Better Business Bureau to see if there are any consumer complaints on file before you do business with a car dealer, suggests NIADA regulatory counsel Shaun Petersen, who previously worked for the consumer protection section of the Ohio Attorney General’s Office.

Also check with friends and family members to see if they can recommend a reliable dealership, Petersen says. Finally, he says it’s imperative to “do your due diligence to find out if a business has a significant number of complaints.” And if there are?


Student Loans in Chapter 13 Bankruptcy, bankruptcy loans.#Bankruptcy #loans


Student Loans in Chapter 13 Bankruptcy

Except in rare circumstances, student loans cannot be discharged in bankruptcy. But if you are struggling to make your student loan payments, filing for Chapter 13 bankruptcy can allow you to delay or reduce your monthly obligations. Read on to learn more about how Chapter 13 bankruptcy can help you manage your student loan debt.

Your bankruptcy discharge does not wipe out certain types of debt. These are referred to as nondischargeable debts. Unfortunately, student loans are one of them.

Generally, the only way to discharge student loans through bankruptcy is to prove that paying them back is an undue hardship for you. This is extremely difficult to prove and is usually only granted in rare circumstances (such as severe disability). As a result, in almost all cases, you will still be required to pay back your student loans after receiving a bankruptcy discharge.

(To learn more about the undue hardship test for student loans in bankruptcy, see Student Loan Debt in Bankruptcy.)

Student Loans Are Treated As Nonpriority Unsecured Debts in Chapter 13 Bankruptcy

In Chapter 13 bankruptcy, student loans are treated as nonpriority unsecured debts just like credit cards and medical bills. This means that you are not required to pay them off in full through your Chapter 13 repayment plan. Student loans receive a pro-rata share of the total amount paid to unsecured creditors in your plan (this amount depends on your income and expenses). As a result, Chapter 13 bankruptcy can help delay or reduce your monthly student loan obligations during the life of your bankruptcy (discussed below). However, once your Chapter 13 bankruptcy is over, you must continue to pay your student loans.

Under certain circumstances, you may also be able to continue making student loan payments outside of bankruptcy. However, whether you can do this depends on where you live. Most jurisdictions do not allow debtors to pay student loans outside of bankruptcy because they believe it unfairly discriminates against other unsecured creditors by reducing the amount they get paid through the bankruptcy.

How Chapter 13 Bankruptcy Can Help You Manage Your Student Loan Obligations

Even though student loans are not dischargeable in bankruptcy, filing for Chapter 13 can help you delay and manage your monthly obligations. The following are some of the ways Chapter 13 bankruptcy can help you.

The Automatic Stay Prohibits Student Loan Collection

When you file for Chapter 13 bankruptcy, an automatic stay goes into effect that prohibits almost all creditors (including student loan lenders) from trying to collect their debts. This means that Chapter 13 bankruptcy can stop your student loan company from harassing you during your bankruptcy (which can last as long as five years). (Learn more about bankruptcy’s automatic stay.)

Chapter 13 Bankruptcy Can Delay Student Loan Payments

Since you are protected by the automatic stay, you do not have to make regular student loan payments during Chapter 13 bankruptcy. Your student loans will be paid through your Chapter 13 payments according to the terms of your plan. If you have little or no disposable income, you may not have to pay anything towards your student loans in your repayment plan. However, keep in mind that interest will continue to accrue on your student loans during bankruptcy and you will still be required to pay them back after your case is closed. (Learn more about how payments are determined in Chapter 13 bankruptcy.)

Chapter 13 Bankruptcy Can Reduce Your Monthly Obligations

You can still pay back a portion of your student loans through your Chapter 13 plan. The benefit of Chapter 13 bankruptcy is that you only pay back what you can afford. If you cannot afford your regular student loan payments, you can lower your monthly obligations by paying a smaller amount through your Chapter 13 plan. Since Chapter 13 bankruptcies can last as long as five years, this can allow you time to increase your income and more easily afford your payments after bankruptcy.

For nonbankruptcy methods of dealing with student loan payments (including consolidation, forbearance, and reasonable and affordable payment plans), see our Student Loan Debt topic.


How to Get Car Loans After Bankruptcy: 8 Steps (with Pictures), bankruptcy loans.#Bankruptcy #loans


How to Get Car Loans After Bankruptcy

Getting a car loan can be stressful for anybody, but the process is fairly simple, even if you have a history of bankruptcy. Assuming you definitely need a car, your goal should be to find the most reliable car at the most affordable rate. A bankruptcy filing does not mean you have to expose yourself to predatory lending practices. If you’re in the market for a new car, and financing it is the route you wish to take to re-establish your credit history, know that you’re not alone and that there are several options available to you. [1]

Steps Edit

Part One of Two:

Assembling Your Credentials Edit

Bankruptcy loans

Bankruptcy loans

Bankruptcy loans

Bankruptcy loans

Part Two of Two:

Exercising Responsible Borrowing Edit

Bankruptcy loans

Bankruptcy loans

Bankruptcy loans

Bankruptcy loans


Auto Financing, Bankruptcy Auto Loans, Bad Credit Auto Financing, bankruptcy loans.#Bankruptcy #loans


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What a seamless process! I filled out the online application and was behind the wheel two days later!

I got the bad credit car loan with bankruptcy I needed, fast! No more walking for me!