New to this forum.....couple of questions

[senorasimcox]

Hello everyone,

I am new to this forum, and have some questions I hope you can answer. First off, I am on SSI and a single parent of an eight year old. I have many bad debts and one horrific student loan that I have not been able to pay on in years.....now is over $40,000 and of course rising.

I was told that I could file for a Chapter 7, to clear all of the old debts but not the student loan, which was taken out back in 1990. I was also told that I could file for undue hardship, does that mean that the loan will go away forever or how does that undue hardship work?

Eventually, I would like to establish some credit, so possibly to get a different vehicle or something in that nature. Right now, experian is saying my credit score is 580, have no clue on the others.

Hope someone can answer my questions and explain a few things to me.

[keepmine]

Undue hardship is easier said than done. You'll have to file for a separate adverserial hearing in front of a bk judge to argue the merits of your case. The chances of winning are slim.
Do a google search using the term "Brunner Test" to get an idea of what you're up against.

[senorasimcox]

Thank you for your reply........I have heard that since my income level is rock bottom, then I shouldn't have a problem of it getting discharged, but will check out that Brunner Test and see what is contains.

[HHM]

The thing is, you need to prove that for the foreseable future, your income will stay low. So haveing low income "now" is not enough, you must prove that your situation is unlikely to change.

Also, these hardship cases are somewhat involved, typically requiring the calling of expert witnesses on your behalf; usually two; one to testify as to the nature of the hardship and another to testify as to why the hardship will prevent you from earning enough money to pay your necessary living expenses. You can expect most attorney's to charge around $10,000 for a hardship case.

[senorasimcox]

Thank you for your reply.......does it matter if its family or not as far as witnesses goes?

If I had $10,000 then I wouldn't need to file for bankruptcy, kind of like defeats the purpose......I could pay off some of those outstanding bills on my credit report.

[HHM]

Unless your family members are experts on the nature of your hardship and are accuarials such that they can predict with a high degree of certainty, that your hardship prevents you from earning a living, they are not likely the best witnesses.

[lrprn]

If your loan(s) are government loans, have you contacted the US Dept of Education about repayment plans to see if you qualify for one that takes your income into account? Here's all the information about that - http://www.direct.ed.gov/RepayCalc/dlindex2.html

If you can hang on for six more years, your 'horrible' student loan will be 25 years old. If it's a US Dept of Education student loan, then any outstanding balance is forgiven at that time (same source as above).

Last, here's an excellent discussion about how to discharge student loans in bankruptcy - http://www.studentloanborrowerassist...rg/bankruptcy/

Hope this helps!

[senorasimcox]

Thank you for answering my reply.......its 19 years old now, I didn't see where it said if it was 25 years old, it would be cancelled or discharged......I did see however that payments range between ? to 25 years, now after 25 years have no clue what happens then......oh I can wait another 6 years, have waited many years now......being on SSI, I cannot afford what they want a month in payments.....there is just no way, I have a kid to think about, you know to survive. I wonder if after those 6 years, what I have left on my credit report, could be filed under a chapter 7......because by then I imagine lots will be written off. What happens to the positive stuff on your credit report? I mean if a person does file for a Chapter 7?

[senorasimcox]

Unless your family members are experts on the nature of your hardship and are accuarials such that they can predict with a high degree of certainty, that your hardship prevents you from earning a living, they are not likely the best witnesses.

My family can speak for me on being disabled......hopefully when I am ready to file a chapter 7, if its before 6 years, then I won't have any problems with the undue hardship......after 6 years, it is supposed to be cancelled or discharged by then.

[HHM]

I hate to say it, but you are "over-simplyfying" a complex legal case. It is one thing for someone to testify that you "are disabled". What are they going to really say... so and so Dr. said you are disabled. Guess what, that is hearsay and non-admissiable as evidence. If you are disabled, you need to get a Dr. (of some sort) to testify as to the fact that you are diabled. Further, you need to get someone to testify that the disability actually prevents you from earning enough money to meet your basic expenses.

I hate to burst your bubble, but these are "real" trials that need realy testimony.