Student loans can not be settled
In the past, student loans could only be vacated (discharged) in the process of bankruptcy and was dependant on how much time had passed since the payment due date of the student loan, and the date of the bankruptcy filing.
As of May 28, 1991 and before the law passed October 8, 1998, a loan was
vacated by the submission of a "general discharge order" if the first payment
was to be paid on the student loan no less than 7 years earlier than the
bankruptcy was filed. Before amendments that were put forward in 1991, five
years was the minimal requirement. If there were any times during this period
where you were not required to make a payment for whatever reason (grace
periods, delays in debt enforcement, deferments, etc.) this time is legally
required to be subtracted from the loan maturation (due date) and the
bankruptcy filing date. Outstanding student loan debts that fall within the 7
year window and meeting the above conditions, can be discharged if the court
decides to place an express finding that repaying this outstanding student loan
would put "undue hardship" on the lendee. All these requirements are applicable
to both student borrowers and by parent borrowers or PLUS loans, and will also
be applied to any loans taken to pay of prior loans, also known as
consolidation loans. The part of law which is charged with dischargeability is
governed by 11 U.S.C. 523 (a)(8).
To know if you qualify to have your student loan vacated by a court bankruptcy filing, you will need to provide the following information to your bankruptcy attorney first:
1) Notice of First Meeting of Creditors
2) List of Your Creditors
3) Your Final Discharge order
If you are having problems with other unsecured debts, such as credit cards or medical bills, you can settle those debts and have them reduced. To start the process, call 888-314-1403 to speak with certified credit counselor for free.
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