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I Filed Bankruptcy 7 Last Year But Still Owe Parent PLUS Loan? – Kristin

Written by Steve Rhode

“Dear Steve,

Please help…I filed Bankruptcy 7 last year but syill have a 80,000 parent PLUS loan…I have used the unemployment deferement and will try for economic hardship next….I just started receiving social sec for widower benefits just 800.00 a month

Shall I just default onthe plus loan and let them take 15% OR just keep deferring or using forebearance if I can….

Thank you soooooooooooooo much!!!


Dear Kristin,

You are correct that the bankruptcy did not touch the student loan. But all is not lost.

If you do default on the student loans and they move to garnish your social security benefits you can file an appeal and state your case for a financial hardship. The garnishment will then be greatly reduced or stopped.

Social security defines financial hardship as “We will find financial hardship when you show that withholding a particular amount from your pay would deprive you of income necessary to meet your ordinary and necessary living expenses. You must give us evidence of your financial resources and expenses.”

If you don’t have any big assets and can’t afford the payments, stop. You really don’t have any other choice, do you?

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

See also  MY SSDI payment is About to be Garnished Over a Federal Student Loan

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • To clarify My Parent Plus Loan was a Government the Federal Direct wm d ford …..NOW it is going to Sallie Mae….Is this still a government Loan or does it change to private I don’t Understand…? Many Thanks!

  • UPDATE Mar 22 I get a not from DIRECT LOAN svc..stating this loan is now at SALLIEMAE ….. NOW what do I do ???Please help

  • So I wonder if I should continue to use deferments or forebearance OR just default on it? How long would it take to garnish my Social security? I live with my daughter so I just barely meet my living expenses
    Thanks again so very much!

    • I have no idea how long it will take but I would expect at least 6-9 months.

      There is no reason you can’t just push it along but at some point those will be up and you will probably eventually default.

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