I filed ch#7 bankruptcy several years ago (about 4-5). I was told then that I could not discharge my student loans by the attorney that handled my case. I took his advice and did not attempt to include my student loans in the process. I have since had my loans in deferment and I am currently in a income-based repayment plan. I feel like the cycle has me trapped and will not allow me to fully get back to financial well being, as my income is still limited (I started a non profit and do a lot of youth outreach that has not necessarily offered the most financial payouts, but the sense of purpose and passion are unmeasurable). I saw something on line where it actually is possible to include your student loans in a bankruptcy and how you can re-open the filing if need be. I saw where some people got approved to have them fully discharged, not just given an ongoing band aid.
Can you include student loans in a ch#7? If the bankruptcy was already filed and discharged can it be opened back up? Or can some type of amendment be made to the original filing? What are the chances of a bankruptcy judge discharging student loans and what are the qualifications to get them discharged?
Please review carefully with the attorney who filed your Chapter 7 bankruptcy. You were supposed to include ALL of your debts, whether they were dischargeable or not.
The discharge of student loans in bankruptcy requires not only the re-opening of the bankruptcy in your case, but also starting a lawsuit called an adversary proceeding. In this lawsuit, you will have to prove that the payment of your student loans would cause you to suffer an undue hardship. You also have to prove a good faith effort to repay, which your income-based plan may satisfy.
But getting the loans discharged on an "undue hardship" is more difficult than it sounds. Consult with a local attorney about the details. Also consider getting a student loan attorney to review your income based plan. In some cases, the payment can be "zero." Or the public service forgiveness option may be possible. But no, adding creditors which you should have already disclosed will not "automatically" result in a discharge of student loan debt.
I am not your attorney unless you and I have signed a retainer agreement. What I am saying is not legal advice. Do not act on this information without engaging my services, this is for consideration only.
Mr. Brewer's answer is correct & contains several on-point suggestions. I would add some private (non-govenmental, other than like Sallie Mae or NelNet) may be dischargeable without an Adversary. Government student loan dischargeability criteria is "extreme" hard-ship based & the illustration I often use is that, say, someone obtains an expensive degree but then has an accident & is a parapalegic, that would qualify, but shy of that most likely not. And for a government student loan you must litigate it (the Adversary proceeding) to find out. I prevailed in the one I handled, but the government student loan lenders hired big firms & fought hard. Call some BK attorneys in your area & ask for a referral to a BK attorney who has expertise in this unique area.
You are asking several different questions here.
Can a Chapter 7 case be reopened to add pre-petition student loans not originally scheduled? Possibly, but unlikely. You'd have to file a motion to re-open the case, and if the only reason to re-open it is to add student loan debts you deliberately excluded originally and then try to discharge those debts, my guess is that the court will deny the motion to re-open.
Can student loans be discharged in a Chapter 7 bankruptcy? Yes, but to discharge student loan debt you have to prove that you are basically unable to support yourself due to circumstances beyond your control which are not likely to change in the future. The facts as you've described them (you don't make much money because you've chosen to do work that is emotionally but not economically rewarding) are unlikely to result in a discharge of student loan debt. Complicating your case is the fact that you failed to disclose the debts when you filed the case.
All debts have to be disclosed when filing a bankruptcy case, including debts that are non-dischargeable. Failing to make a complete disclosure opens you up to a finding that your case wasn't filed in good faith, so even if you wait to file another Chapter 7 case eight years after the first petition was filed (when you would be eligible to receive a discharge of dischargeable debts) there's an argument to be made that it's bad faith to attempt to discharge all or part of the student loans that you didn't disclose in the first case.
Contact the lawyer who represented you in the first bankruptcy. It's possible that you did disclose the student loans but you remember them as being excluded because they weren't discharged (it happens). If you really didn't disclose them talk to the lawyer about filing a motion to re-open just to disclose them. Your bankruptcy lawyer shouldn't have allowed you to cherry-pick which debts you disclosed, unless the lawyer didn't know that you had the student loans. Most bankruptcy lawyers pull credit reports when preparing schedules, but maybe yours didn't.
If I am misunderstanding and you did disclose the student loans but did not file an adversary proceeding to try to discharge them, then my answer is a little different - no, the court will not grant a motion to re-open the case 4 or 5 years later to file an adversary now.
All debts should have been included in the Chapter 7, including the student loans. During the bankruptcy your attorney should have brought an adversary proceeding to determine whether the loans could be discharged. It would be your burden to establish that paying the loans are an undue hardship for you.
If you did not pay the loans and the creditor filed a law suit against you in state court, you could bring up the issue of discharge in that state court proceeding since the issue of discharge of student loans is not exclusive to the bankruptcy court.
The chances that a judge would grant a motion to reopen the case to add the student loan or to file an adversary complaint against a listed creditor is not something I can answer. I will point out that you have waited 4 to 5 years to take action.
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You are mixing up several concepts here.
First, you must INCLUDE all your assets and all your debts in any bankruptcy case. So if you did not list your student loans as a debt in your original case, then you basically committed fraud, although there really isn't any repercussions for that.
If you are asking (as I think you are) whether student loans are DISCHARGEABLE in a Chapter 7 case, the answer is Yes, if you can prove "undue hardship" as that term is defined by courts in your jurisdiction.
As to your question about timing, yes you can seek the undue hardship determination at any time, even after your case is completed. That obviously requires you first seeking to reopen your bankruptcy case for the purpose of litigating the undue hardship claim.
State courts also have concurrent jurisdiction on this matter so you could, if you wanted to, have a state court adjudicate the undue hardship claim, but I would recommend doing it in bankruptcy court.
Legal disclaimer: Mark J. Markus practices law in California only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation.
My colleagues have all answered your question correctly. Opening up your bankruptcy proceeding and commencing an adversary proceeding to get your loans discharged would be very difficult. But I have a potentially better solution for you. Contact a student loan attorney in your area. Since you work for a non-profit and are paying your loans back on an income based plan, you may qualify for Public Service Loan Forgiveness. Only loans that are direct loans will be forgiven under the program (which means you may have to consolidate) and you have to pay on an income based plan for 10 years, remain current and re-submit your income every year, but if you qualify and finish the program, any remaining balance of your loans will be forgiven, tax free, after 120 months of payments under this program.
Please note: I am a licensed attorney in New York. This response is intended only as general commentary. This response is not legal advice and does not create an attorney client relationship.
You have seen the answers. I have discharged over $3 Million in student loans in 40 student loan lawsuits all posted on my website..INCLUDING a case opened up over 4 years after discharge and settling it discharging 95% of the debt! But each case is different. Attorney Markus says it exactly on what you need to do. But as Attorney Kitzner states other options like the Public Service option could possibly be available. The first thing to do is look at your options.
There is now chance ANY ATTORNEY alive (or dead) could answer the "chances of a bankruptcy judge discharging"... Why? Because all the facts that govern the 3 prongs in such a lawsuit must be ascertained and analyzed in such a case and that has nothing to do with the additional factor: if you have a judge in FL that has ruled on these and will do the analysis if you either file PRO SE or find an attorney to meet to do so! You can GOOGLE the 3 prongs of the Brunner test but frankly that will not mean much to you.. I have over 30 cases cited in my trial briefs so they get complicated! .
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