Your obligation to repay Title IV, HEA student loan and grant liabilities can be canceled (discharged) due to bankruptcy under certain conditions. Discharge of your liability does not discharge the liability of a cosigner or endorser of your debt.
Bankruptcy filed prior to 10/1/98
Dischargeability depends on the amount of time between the date on which a loan or grant liability has been due and the date the bankruptcy was filed, with limited exceptions. A loan or grant liability is discharged by entry of a general discharge order if the first payment came due on the debt at least 7 years before the bankruptcy was filed. Prior to 1991 amendments, only five years was required.
Any grace periods, forbearance or deferments must be subtracted from the time elapsed between the first payment due date and the filing date when calculating time in repayment.
Debts outstanding for less than the required seven year period generally can not be discharged.
Bankruptcy filed on or after 10/1/98
Bankruptcies filed on or after 10/1/98 are not dischargeable, with limited exceptions.
Non-dischargeablity requirements apply to educational loans received by both student borrowers and by parent borrowers (PLUS Loans), and apply to loans received by any kind of borrower to pay off prior loans (Consolidation Loans). Dischargeability is governed by 11 U.S.C. 523 (a)(8).
In order to determine the dischargeablity of a loan, the servicing agency needs the following three pieces of information from you or your attorney:
Please Note:
You should consult an attorney to determine the full critreia by which a
bankruotcy debtor may quailfy for a discharge of his/her student loans.