Whether you are looking into filing bankruptcy or have done so, you may have heard filing bankruptcy will not discharge your student loans. While most student loans are not dischargeable in bankruptcy, there is a second step you can take during your case to determine whether your student loans are dischargeable in whole or in part. This step is called an adversary proceeding.
When you file bankruptcy, your student loans will be subject to the automatic stay like your other creditors. This means that although you may voluntarily pay them, they cannot involuntarily collect from you during your bankruptcy case.
If you and your attorney decide you should file an adversary proceeding to determine dischargeability of your student loans, your attorney would file a separate action related to your bankruptcy. When determining whether you should file an adversary proceeding or not, your attorney will look at the age of your student loans, repayment history, income, your age, future income, household size, types of student loans, and various other factors. Adversary proceedings commonly come with a different retainer than the core bankruptcy proceedings, so make sure to discuss specifics regarding representation with your attorney.
If the adversary proceeding results in a total or partial discharge of your student loans, the discharge in your bankruptcy will discharge your liability on those loans.
There are various types of student loans you may have, whether they are federal, private, for tuition, or other school costs. Student loans are a nuanced area in regards to bankruptcy, you should speak with an attorney to determine your course of action.
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