I am filing an adversary hearing to have my student loans discharged. I am on SSI. I have read the Brunner Test and feel I strongly qualify. I have case law as well.
Last month I agreed to pay $5.00 a month to ECMC to try to rehabilitate my loan and get out of default. I still have 2 others in default and have numerous in deferment. I don't know how these 3 didn't make it into deferment. I have been in deferment since 2012 on these. I did the math and $5 a month is only a couple thousand dollars over like 25 years and that barely makes a dent. All this student loan debt is very frustrating and depressing and hard to keep under control. And obviously I cant afford an attorney for this.
It will go to the 3rd prong in showing good faith. But in reality, if you will never pay off the debt then why not try to discharge ALL of them as you should be trying. Otherwise, how will subsection (a)(8) ever be used? Furthermore if you have a permanent disability that also prevents earning money then the federal loans you can apply for that discharge outside of the adversary. But private loans it wont matter if you have those. Good luck. And I have helped several persons file PRO SE adversary proceedings who could not afford an attorney so glad to hear you are trying. I wish more bankruptcy attorneys tried to do them too. I have filed over 40 such proceedings (all on my web site) and discharged over $3 MILLION in such loans. So I love hearing and hope after you are all said and done you email back and let me know the result and what happened. The rehabilitation will lead to having to enter one of the programs when you are done so hohpe you try and discharge all! Good luck.
I agree with Richard, but would point out one caveat. It sounds like we are dealing with Federally Guaranteed Loans. If your income is solely SSI, once your loans are rehab'd, you will apply for an income driven repayment program. Odds are, you will have a $0 monthly payment on one of those programs. But even at $5 per month, the argument gets really thin as to how a $0 monthly payment (or token $5 payment) creates an undue financial hardship. That doesn't mean there are no arguments...(i.e. futility argument and the tax consequences argument), but it is becoming increasingly difficult to actually discharge federal student loans in BK because of 3rd prong Brunner requiring good faith effort, and that it is possible to have a really low or $0 monthly payment.
If you are on SSI because you are disabled and you were became disabled after you incurred your student loan debt, then you should consider filing for an administrative discharge on the federal student loans. If you tried the administrative discharge, you may find that it will be easier to accomplish after you file you adversary proceeding (AP).
As I stated, you have a shot at discharging your liability on the student loans as federal student loans can be discharged through an administrative discharge based upon your disability. If you cannot discharge the type of private student loans you have, if any, then your SS benefits cannot be garnished or attached to collect that type of debt. You may be able to discharge the private student loans through a bankruptcy case. Since there is no administrative discharge and our client can show that not only can he/she not afford to pay the loan now and that he/she will never be able to do that as his medical condition is permanent, it is possible to meet the requirements that are used by my most bankruptcy courts to establish that the debt should be discharged.
The administrative discharge process can be tedious. After you supply information and complete the forms required, you will probably be asked to supplement with additional information, which may happen more than once. After several submissions of requested information, you may be informed that time has expired and that you will be required to start over again.
Our firm has found that after the process has bogged down to the point that our client must start over again more than once, even the administrative discharge process can be moved forward by filing a bankruptcy and then filing an Adversary Proceeding (a lawsuit in the bankruptcy case, for short I will call this an AP). Once the U S Attorney or other attorney is involved we are told that our client can receive an administrative discharge, We provide the attorney representing the student loan lender with a history of the attempts to obtain the administrative discharge and we start the administrative discharge process again. This time, the process almost always goes smoothly and quickly.
Answers and comments provided are for general discussion only. My comments are not to be considered legal advice and they do not create an attorney-client relationship.
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