Student Loans

A case under chapter 13 can often times be called “reorganization”. In chapter 13 cases, you submit a proposed plan to repay your debts to your creditors over a period of said time, usually from your future income. These plans allow you to get caught up on mortgages, car loans and other secured debts. If you are unsuccessful in getting your student loans discharged based on undue hardship in either chapter 7 or chapter 13 cases, there are still some advantages to be had when filing for chapter 13 bankruptcy. One of which, is your proposed chapter 13 plan will determine the amount of your student loan payments, not your loan holders. You then make these court appointed payments while following the plan for typically around 3-5 years. You will however, still owe the remainder of your student loan debt to the loan holders once you are out of bankruptcy, but you can then try and discharge the remaining debt based on undue hardship. While you are making payments through a bankruptcy court, there can be no collections actions taken against you. There may be other options available to you. In some cases for example, some judges allow student loan borrowers to give priority to their student loans during the duration of the Chapter 13 plan.