Student Loan Question

[anthro]

I'm sure there have been a million questions about student loans and chapter 7. Here's another one.

I understand that bankruptcy cannot clear student loan debts unless hardship is proven - which I have heard is rather difficult (is this true)?

What if the student loans were payed off using a credit card, would the bankruptcy clear that credit card debt? Our CC interest is lower than our student loan interests, but we still fear we may not be able to pay any of it back. For the time, we're thinking about getting the lower interest (which should become lower because we're making such a large "purchase"), but if we had to file bankruptcy, would it clear that debt as well?

Thanks for any help.

Anthony

[tinroofrusted]

Sorry... was writing something else and hit the wrong button

[HHM]

That's a tricky question. When did you transfer the student loan to a CC. (Incidently, what kind of student loan did you have where a CC would have a lower rate. Unless it was a CC promotional rate, but because the way CC's compount interest, the student loan is still cheaper.)

If you are thinking about BK, you need to wait at least a year since the date you transfered your student loan to a CC. But to answer your question, the CC may fight the discharge becuase your transfered a non-discharable debt to a discharable debt.

Also, yes, its very difficult to prove a hardship for purposes of discharge.

[anthro]

We haven't done it yet, just thinking about it.
Why exactly would we have to wait a year?
If it was a little longer, would the credit card still try to fight it?

[HHM]

The reason you have to wait at least a year is that you will stand a better chance that the CC company will NOT challenge your BK on the grounds of Fraud if you wait a year.