Ask The Get Out of Debt Experts Bankruptcy Related Student Loans

Can I Go Back and Reopen My Bankruptcy to Include My Student Loans? – Jody

“Dear Lewis,

My story of student loan hell.

Between 1985 and 1989, I took out student loans to the total of approximately $14,000. Being a single mother, thought education would get me a better job than a factory job. So I got my education and could not find a job that would pay me enough to pay rent, electricity, gas, food, gas for my car and up keep on the car, and daycare (which at times I was responsible for all or part of it).

In 1998, I filed bankruptcy and included my student loans, but because of bad legal advice, one little piece of paper (hardship form) that should have been included with my bankruptcy, which would have prevented all of this stress and hell. At the time of the bankruptcy the amount owed was approximately $23,000. The garnishment for the student loans started in December 1999, approximately a year and half after my bankruptcy had been finalized.

As of today, approximately $26,000 via my garnishment allow has been paid to the student loans. This amount does not include the amount that had been paid before the filing of my bankruptcy, one tax return taken, and according to the NSLP, I am in default and I still owe approximately $39,000 and none of which has gone to the principal of the original loan.

I am also wondering why if in fact if I was in default on my student loans, why is my credit so good, In the last six years I have been able to secure several loans one for a home and just recently for a car and have received several credit cards.

When I contacted NSLP that the only remedy was to redo the remainder of the amount owed (approximately $38-39,000) to a 25 year loan and any amount remaining after the 25 years would be forgiven, but I would have to claim it as income and pay taxes on it.

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I did not sign up for an interest only loan, but that is what I currently have. I would really appreciate if someone would take a look at this matter for me and see if some kind of resolve you occur on this matter.

Is there any way to go back and reopen my original bankruptcy and sumbit the Hardship form that should have been included in the bankruptcy and then make my garnishment go away, as I have already paid more than what was originally included in the bankruptcy.

Jody”

Jody,

I am sorry that your student loans have given you so much trouble over the years. Unfortunately, the situation has not changed much. I believe I saw a statistic the other day that student loan debt now is greater than credit card debt in this country. Unscrupulous schools still prey on students with promises or illusions of fabulous careers with employers waiting to offer jobs at high pay. It usually is not true.

Unfortunately, I have not been a lawyer as long as you have had these student loans. So I have had to do some research. You are indeed correct. At one time, student loans were dischargeable. But since 1976, dischargeability has eroded down to nothing.

Here is what I was able to find from a report to Congress in 2007:

  • Prior to 1976, student loan debt was dischargeable.
  • In 1976, government student loans became non-dischargeable not until 5 years had elapsed from the beginning of the repayment period.
  • In 1990, the 5 year bar above was lengthened to 7 years.
  • In 1998, the 7 year bar was eliminated; government loans could never be discharged.
  • In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) which now made private education loans nondischargeable as well.
  • It looks like the 1998 amendment became law on October 7, 1998.

You said you filed bankruptcy in 1998. But we don’t know what date. I also don’t know the nature of your student loans. Were they government loans? Also, I need more information regarding this document you state is so important to the bankruptcy filing. Also, when did the repayment of your student loans beging? Did you do any deferments? If so, when did they end?

You can post your answers to me in the comments section below.

I think anyone trying to help would need much more information. But you may need to see a consumer lawyer who specializes in student loan issues.

I hope this helps. I wish you the best of luck!

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

If you have a bankruptcy question you’d like to ask just use the online form.

About the author

Lewis Roberts

Florida Consumer Protection Attorney

8 Comments

  • I cannot speak to the credit reporting issue. I would state: don’t look a gift horse in the mouth. If your credit rating his high, even with the student loan issue, I wouldn’t argue.

    I understand the deferments were before the bankruptcy. That is the point: if you were in deferment before the bankruptcy, it could have affected your ability to discharge the student loan. In 1990, there was a 7 year rule: 7 years had to have elapsed from the beginning of the repayment period.

    Is the attorney who filed your bankruptcy in the 1980’s still practicing? If so, have you contacted him or her for clarification?

  • No the deferments were before the bankruptcy…If my lawyer for the bankruptcy would have filed the hardship paperwork as I had requested I do not belive I would be having this problem. Also, how can NSLP tell me I am in default and payments to a collection agency have been done via a garnishment for 12 years and none of this shows on my credit report and I have a credit score of 799.

  • No the deferments were before the bankruptcy…If my lawyer for the bankruptcy would have filed the hardship paperwork as I had requested I do not belive I would be having this problem. Also, how can NSLP tell me I am in default and payments to a collection agency have been done via a garnishment for 12 years and none of this shows on my credit report and I have a credit score of 799.

    • I cannot speak to the credit reporting issue. I would state: don’t look a gift horse in the mouth. If your credit rating his high, even with the student loan issue, I wouldn’t argue.

      I understand the deferments were before the bankruptcy. That is the point: if you were in deferment before the bankruptcy, it could have affected your ability to discharge the student loan. In 1990, there was a 7 year rule: 7 years had to have elapsed from the beginning of the repayment period.

      Is the attorney who filed your bankruptcy in the 1980’s still practicing? If so, have you contacted him or her for clarification?

  • If you deferred the payment to within 7 years of the 1998 bankruptcy, then it appears they were non-dischargeable.

    Also, what was the document you referred to in the original post?

  • Hello, my bankruptcy was in July 1998 and I live in Nebraska. When I filed my bankruptcy $25-35,000 was credit cards and approximately $24,000 was student loans. I did defer the payments as long as I could. NSLP tells me I am in default but when I had some one contact the collection agency collecting my student loans, they were told that they did not care to offer me a settlement, because they were getting something and did not care if the matter was ever settled.

  • Hello, my bankruptcy was in July 1998 and I live in Nebraska. When I filed my bankruptcy $25-35,000 was credit cards and approximately $24,000 was student loans. I did defer the payments as long as I could. NSLP tells me I am in default but when I had some one contact the collection agency collecting my student loans, they were told that they did not care to offer me a settlement, because they were getting something and did not care if the matter was ever settled.

    • If you deferred the payment to within 7 years of the 1998 bankruptcy, then it appears they were non-dischargeable.

      Also, what was the document you referred to in the original post?

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