Note: This is one of many way student loans are handled in BK. Remember, student loans can not usually be discharged, however, they are still unsecured debts and they are not considered a priority debt.
Student Loan in Your Chapter 13 - Congratulations, You are Officially in Limbo!
We have run across a confusing predicament for Chapter 13 cases filed in the Northern District of Georgia that involve student loans. According to one of the assistant trustees whose identity we will protect, the judges in the Northern District have not yet decided how debtors should treat student loans in Chapter 13 case.
Pre-October 17, we could either pay the principal balances in full within the Chapter 13 plan, with accrued interest surviving, or we could pay student loans directly and not include principal in the plan.
Under the new law, however, we have been advised that the trustee will object to either treatment - we can't pay the student loans in the plan nor can we pay them directly. What should we do? "See if you can get the student loan into deferment status" was the reply.
Presumably this student loan purgatory will come to an end at some point, but for now, the cases will just be reset.
Student Loan in Your Chapter 13 - Congratulations, You are Officially in Limbo!
We have run across a confusing predicament for Chapter 13 cases filed in the Northern District of Georgia that involve student loans. According to one of the assistant trustees whose identity we will protect, the judges in the Northern District have not yet decided how debtors should treat student loans in Chapter 13 case.
Pre-October 17, we could either pay the principal balances in full within the Chapter 13 plan, with accrued interest surviving, or we could pay student loans directly and not include principal in the plan.
Under the new law, however, we have been advised that the trustee will object to either treatment - we can't pay the student loans in the plan nor can we pay them directly. What should we do? "See if you can get the student loan into deferment status" was the reply.
Presumably this student loan purgatory will come to an end at some point, but for now, the cases will just be reset.
