Get a free consultation with a bankruptcy attorney to see what they can do for you. This is not something easy where an attornwy will just say yes.
I feel like those attorney fees are just wrong and that they will be dischargeable but I don't know and I wouldn't want to speculate when you can get a consultation from someone in your area.
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11 USC Sec.523(a)(8) states that certain debts are not dischargeable: educational loan guaranteed by a governmental unit, or non-profit institution; any other educational loan that is a qualified education loan as defined in Sec. 221(d)(1) of the Internal Revenue Code. So, you need to meet with an attorney who specializes in student loan problems, take him/her your loan agreement and see what he/she has to say. Good luck.
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It is almost impossible to discharge this type of educational loan in bankruptcy. You need to sit down with a bankruptcy attorney to review all the facts in your case.
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How do you know the money was returned to the lender?
In any event, as the others have suggested, no bright line answer exists for your circumstances. You said you signed a promisory note; when did you withdraw, did you give notice, did you sign a "Master Promisory Note." Were you actually eligbile for student loans. Those are just some of the questions that need answering to know if you have any "technical" defense to the student loan.
I agree with everyone that student loans are not dischargeable. However, it is unclear whether this particular debt is a student loan at all. As stated by Mr. Smith in a comment, not all debts owed to state schools are student loans. In fact, based on the information provided, it sounds like the alleged debt may not be a student loan and, therefore, may be dischargeable.
As a result, I would strongly recommend that you consult with a bankruptcy / debt defense attorney to discuss your case as soon as possible.
I agree with Mr. Soto. I have had a number of client with debts owed to Universities for whatever reason. All discharged. You need to determine if the debt is a student loan or not. If not, the debt should be dischargeable when filing Chapter 7 bankruptcy.