Hi. In a Ch. 13 Bankruptcy, does ANY of my monthly payment get send to my Federal student loans? I can't quite understand the case summary/statement when I look at it...I imagine that they aren't receiving a dime. Since this is the case, are these student loans sitting there gaining tons of interest?? I believe that I know the answer to this. My next question is this: while I am in this Ch. 13 (I still have about four year to go), would I be allowed to take out more Federal Student Loans to continue my education? And another question is this: would the federal government even approve student loans for a person with my situation? Thank you all for your prompt and knowledgeable replies.
You cannot borrow any additional monies while you are in a Chapter 13 case without approval from the Chapter 13 Trustee and the court. Student loan debt cannot be discharged in bankruptcy. You would list the loan balances on your petition and schedules, and the loans are paid by the trustee as general unsecured debts. Because they are unsecured debts, they are paid last by the Chapter 13 Trustee. If you are in a 60 month Chapter 13 plan, some or all of the student loan debt will get paid. That depends on the amount of your loan balances, and the amount of your monthly plan payments. You should discuss these issues with your attorney, or with another experienced bankruptcy lawyer.
Your student loans would be paid at the same rate as your other unsecured creditors which means they will very likely get next to nothing and even then only at the end of your case after your secured and priority creditors have been paid. The student loan creditor can still charge you interest while you are in you bk. You can incur debt for additional student loans but you would need court approval in order to do so. And yes, I think it possible you could get new student loans even while in a bk.
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First, I have discharged over $3 Million in student loans for my bankruptcy clients of which 40 lawsuits and results are even posted on my website. But attempting to discharge them is hard and in some parts of the country some attorneys state NEVER. But that is not the law..it is proving undue hardship. But if you are trying to get new student loans and trying to discharge old ones..I doubt it!
Second, your court order or plan most likely states you cannot incur new indebtedness w/o obtaining a court order so read and or discuss with your attorney that issue.
Third, yes interest accrues on your student loans during the case.
Fourth, and YOU SHOULD LOOK AT THIS IMMEDIATELY: THERE IS A DEADLINE FOR CREDITORS TO FILE PROOFS OF CLAIMS. SEE IF THE CREDITOR ON THE STUDENT LOANS DID FILE A CLAIM AS YOU WANT THEM TO RECEIVE $ AND NOT THE DISCHARGEABLE TYPE CLAIMS..SO THE MORE THEY ARE OWED, THE HIGHER THE % THEY WILL BE PAID IF THEY FILED A CLAIM. What if the deadline passed and they did NOT file a claim? Or even if not passed but did not file a claim, then you may possiibly file a claim on their behalf which you should speak to your attorney on right away also. The local rules govern those deadlines and rules. Because you have 4 years to go you state I assume you are 1 yr or less into the plan..some times is crucial on checking those deadlines.
We don't know why you are in a ch 13 but remember it is possible if circumstances change to amend your plan or possibly convert to a ch 7 but those are issues beyond a reply herein. Good luck.
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