Private Student Loans?

[redswami]

I understand that since last year private student loans (and any student loans for that matter) are difficult to discharge.
My DH ( we are seperated) is filing Ch7 this week and he has nearly 100K in private student loans. He earns 500 per week, and this will go down to $0 in about two months as he will no longer be legally able to work (his work visa expires). Does anyone have any knowledge or experience with these types of loans, and how one qualifies to get it discharged? His atty did not really know too much about private student loans...

TYI

[HHM]

First, are you absolutely sure they are private student loans, were the loans from a US institution or an overseas lender?

The BK statute in question is Chapter 5, Section 523(8)

You basically have two approaches, (1) after your BK is filed, launch an adversary proceeding to determine if the debt is the type of student loan protected from discharge under the above referenced statute. (2) if the answer to (1) is YES, then all you can do is continue the adversary proceeding and claim an allowed hardship. In essence, you would have to prove that for the foreseeable future (i.e. 5-10+ years), the debtor could not both pay his necessary living expenses and pay the student loan. It is a very tuff burden to meet. About the only people who win these cases are those that have become severely disabled.

On the side, that seems like an awful lot of student debt for someone making $500 a week?

[lrprn]

I understand that since last year private student loans (and any student loans for that matter) are difficult to discharge.
My DH ( we are seperated) is filing Ch7 this week and he has nearly 100K in private student loans. He earns 500 per week, and this will go down to $0 in about two months as he will no longer be legally able to work (his work visa expires). Does anyone have any knowledge or experience with these types of loans, and how one qualifies to get it discharged? His atty did not really know too much about private student loans...

TYI

Since you mention your DH was here on a work visa, that means he isn't a citizen of the US. If he isn't a citizen, is he planning to leave the US when his work visa expires? And if he is going to leave, does he plan to return to the US in the future? And as HHM already asked, are the private loans from US institutions?

You already know that it's almost impossible to get a hardship discharge for either US government or private student loans in bankruptcy. Your husband must prove three things in court for US student loans to be cancelled without payment:
1. If he is forced to repay the loan, he would not be able to maintain a minimal standard of living.
2. There is evidence that this hardship will continue for for a significant portion of the loan repayment period.
3. He made good-faith efforts to repay the loan before filing bankruptcy (usually this means he's been in repayment for a minimum of five years).

Visit the following websites for some solid information about what your husband's options are if he can't pay US student loans and can't get them discharged through bankruptcy:

http://www.ombudsman.ed.gov/bankruptcy.html

http://www.finaid.org/questions/bankruptcy.phtml (scroll down to Discharging Student Loans Through Bankruptcy section)

http://www.nolo.com/article.cfm/pg/1/objectId/63C80677-0D3E-4505-AC3B7782841603F6/catId/2E00F7A7-E208-4858-BD0B8308A4D30D8A/213/208/135/ART/

One last thing....it's concerning that your DH's lawyer doesn't know very much about student loans in bankruptcy. Is DH's lawyer's practice just in bankruptcy?

One more question....did you co-sign for his student loans which, if he files and since you are still officially married, could then make YOU responsible for paying the loans?

[redswami]

The loans are from a private loan company (essentially predatory lending) but he does not have any us gov't loans.

He has a professional degree - but his profession doesn't really make a lot of money when starting out. Also, since he has to work for a company (as opposed to opening his own office) - they really take advantage and do not pay very well at all. He rightfully feels like an indentured servant - if he complains about anything they hold his visa over his head.

He does not plan on going back to his birth country. Once he leaves his current position, he will be unable to work for about 2 years (awaiting a different type of visa).

Even if he stayed at his current employer - he would not make more than 40K gross - very tough to pay your mortgage and bills on that, and the student loan company has not been open to making any arrangements - they just sent it out to lawyers for collections. As it is, he had most of them in deferrment for the past couple of years, and we have been paying on one of them. We have been living a month to month existance for a few years now and any emergency threatens our ability to feed the kids. I moved to a different state this summer for a new job (before I was working at the same company as him).

I did not sign on any of his loans. As for the lawyer, he is very nice and this os the only type of law he prctices. He just did not know much about private student loans.