Unsecured Student Loan/Bankruptcy

[ereyes83]

I recently applied for bankruptcy, I gave my lawyer all my information/bills including information about a student loan I took out. The loan I took out was from http://www.educationone.com/foryou/undergrad.html

[StaciMM]

Most student loans are not dischargeable. They should still be listed as a creditor, regardless. I looked around this site-can't find anything about a nonprofit or governement relationship. It may be dischargeable, though I don't know how you could find out for sure.

[abc123]

Education one - i.e. bank one student loans

Hey - just to let you know, I did some research, and Education One loans - a Bank One loan, though now Bank One is under JP Morgan Chase - are GUARANTEED by TERI - The Education Resources Institute - www.teri.org - and they are a non-profit institution that guarantees, from what i understand, quite a few private bank student loans...

This does not NECESSARILY mean that these are not dischargeable, but you should know the code 523 a (8) - that's the bankruptcy code section regarding educational loans and non-dischargeability, says:

Section 523(a)(8) of the US Bankruptcy Code, at 11 U.S.C., excepts from discharge debts:
"for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor's dependents".

- do you see the part "or made under any program funded in whole or in part by a governmental unit or nonprofit instiution" - this is the part that should concern you.

And it still may not be clear 100%, although i've heard that based on this, any TERI or other non-profit related loan is hard or impossible to discharge. Since when a loan is GAURANTEED, I believe the funds initially come from the bank (or whatever lender) and only after default, does the loan come under the nonprofit - i.e. the non-profit then pays the bank the defaulted amount and becomes the "note-holder" or loan holder. Then you're basically trying to discharge from a non-profit, and therein lies the difficulty.

You can check for yourself about the TERI involvement by calling either Bank ONe/JPMorganChase (see www.educationone.com) or calling TERI (see www.teri.org).

One last important note to any other readers: there apparrently ARE private bank loans that NOT guaranteed or serviced (again, the servicing vs. guarantee issue is another thing also) by a non-profit organization. An example of this is apparently Norwest bank student loans ("priority" loans, or "success" loans) now under WELLS FARGO (norwest bought wells fargo but uses the Wells Fargo name). But don't quote me on that one, you should definitely check it out for yourself to be sure. Again, I stress the word "appears" - also, this does not address whether the loan is INSURED by some non-profit entity, and about this whole insurance issue, really don't know where it fits in.

Hope this helps - good luck, and be real careful.