Student Loans & Bankruptcy

Question 1

What are some circumstances in which your student loan could be cancelled?

Answer 1

Your school closed, the school owes you a refund, disability, death, spouses and parents of victims of 9/11

Question 2

What are the specifications for loan forbearance and deferment?

Answer 2

Deferments apply when you’re at least a 1/2 time student, unemployed, military service, graduate fellowship. Forbearance is if you can’t qualify for deferment and are not already in default.

Question 3

How can bankruptcy help an individual?

Answer 3

Can temporarily stop almost all creditors from taking steps against you. Fastest way to deal with debt problems. Some debts can be legally wiped out.

Question 4

What are some things bankruptcy cannot do for an individual?

Answer 4

can’t forgive or discharge all debt

Question 5

What is a Chapter 7 bankruptcy?

Answer 5

Immediate discharge of many debts with the liquidation of your assets that are not exempt.

Question 6

What is a Chapter 13 bankruptcy?

Answer 6

Reorganization of debt, where you pay creditors some or all of what you owe over a period of years. You generally get to keep all of your property.

Question 7

What is an automatic stay?

Answer 7

Court order that temporarily prevents the start of debt collection, utility shut offs, garnishments etc at the start of bankruptcy process.

Question 8

What is discharged debt?

Answer 8

Eliminations your obligation to repay unsecured debts. After bankruptcy, a creditor can seize its collateral and resell it but cannot come after you for the difference.