Frequently Asked Questions

Bankruptcy

What happens to my student loan(s) if I file for bankruptcy?

While in bankruptcy, you are protected from collection activities on most your of your debts, including student loans. During the bankruptcy process your loans will continue to accrue interest, increasing your loan balance if no payments are made. Remember, student loans are not dischargeable (included in your general bankruptcy discharge), absent a finding of undue hardship. Congress intended that discharge for undue hardship be reserved for individuals facing more than the financial hardship that accompanies all bankruptcies. So a separate adversary proceeding within a bankruptcy is required for you to prove to the bankruptcy court that your situation meets the undue hardship standard. Accordingly, unless a bankruptcy judge grants you an undue hardship discharge of your student loan(s), you will still have to pay back your student loan(s) after bankruptcy.

What does dischargeable mean?

When you file for bankruptcy, certain debts, called "dischargeable" debts, are forgiven when you obtain your bankruptcy discharge order. A discharge order permanently prevents creditors... Read more >

When you file for bankruptcy, certain debts, called "dischargeable" debts, are forgiven when you obtain your bankruptcy discharge order. A discharge order permanently prevents creditors (people you owe money to) from taking any action to collect on such discharged debts. Remember, student loans are not dischargeable debts absent proving undue hardship in an adversary proceeding.

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I was told my student loan(s) is not dischargeable debt, what does that mean?

A nondischargeable debt is a debt that is not forgiven as part of your bankruptcy. So you are required to repay it when the bankruptcy is complete. Examples of debts that may be... Read more >

A nondischargeable debt is a debt that is not forgiven as part of your bankruptcy. So you are required to repay it when the bankruptcy is complete. Examples of debts that may be nondischargeable include taxes, student loans and child support. If the bankruptcy court does not determine your student loan(s) is dischargeable, you will have to repay it after bankruptcy. Remember, student loans are not dischargeable debts absent proving undue hardship in an adversary proceeding.

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Is there anything I can do to get my student loan(s) to be a dischargeable debt?

You can file a separate "adversary proceeding" with the bankruptcy court. The purpose of the adversary proceeding is to prove "undue hardship." Please consult with a bankruptcy attorney to... Read more >

You can file a separate "adversary proceeding" with the bankruptcy court. The purpose of the adversary proceeding is to prove "undue hardship." Please consult with a bankruptcy attorney to discuss your options. Learn more >

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How do I prove undue hardship on my student loan(s)?

To prove undue hardship, you must file a separate adversary proceeding with the bankruptcy court explaining your situation and why repayment of your student loan(s) would be an undue... Read more >

To prove undue hardship, you must file a separate adversary proceeding with the bankruptcy court explaining your situation and why repayment of your student loan(s) would be an undue hardship. Please consult with a bankruptcy attorney to discuss your options. Learn more >

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Do I need to authorize ECMC to talk to someone other than myself about my bankruptcy case?

No. However, if you wish ECMC to discuss your private information to someone other than you or your attorney, we will need you to complete and sign an Authorization giving your consent... Read more >

No. However, if you wish ECMC to discuss your private information to someone other than you or your attorney, we will need you to complete and sign an Authorization giving your consent. Send the form directly to ECMC. Mail the form to:

ECMC
P.O. Box 16408
St. Paul, MN 55116-0408

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Why should I make payments on my student loan(s) during bankruptcy if I don't have to?

Interest on a student loan(s) continues to accrue on your loan balance during bankruptcy. Please consult with your bankruptcy attorney to discuss your options... Read more >

Interest on a student loan(s) continues to accrue on your loan balance during bankruptcy. Please consult with your bankruptcy attorney to discuss your options. Learn more >

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If my tax refund was seized, but I filed bankruptcy, can I get my refund back?

If you defaulted on your student loan(s) because you failed to make payments over a 270-day period, your state and federal tax refunds can be withheld (referred to as an offset) to pay... Read more >

If you defaulted on your student loan(s) because you failed to make payments over a 270-day period, your state and federal tax refunds can be withheld (referred to as an offset) to pay back your student loan(s). If you filed for bankruptcy prior to the offset, you may be able to get the money returned to you. Learn more >

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What is Chapter 7 bankruptcy?

In Chapter 7 bankruptcy, your nonexempt assets may be liquidated (sold), to pay your creditors. Unsecured debt, like credit card debt, is usually discharged in the bankruptcy. Remember... Read more >

In Chapter 7 bankruptcy, your nonexempt assets may be liquidated (sold), to pay your creditors. Unsecured debt, like credit card debt, is usually discharged in the bankruptcy. Remember, student loans are not automatically discharged under your general bankruptcy discharge order. So, unless you file an adversary proceeding in which the bankruptcy court concludes you met the undue hardship standard, your student loan(s) will remain a debt you must repay following bankruptcy.

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What is Chapter 13 bankruptcy?

A Chapter 13 bankruptcy does not liquidate your assets, but it does require you to repay all or a portion of your debts in installments specified by a court-approved bankruptcy plan... Read more >

A Chapter 13 bankruptcy does not liquidate your assets, but it does require you to repay all or a portion of your debts in installments specified by a court-approved bankruptcy plan.

If you successfully complete your Chapter 13 bankruptcy plan, the court discharges most or all of your remaining unsecured debt. Remember, like a Chapter 7, your student loan(s) is not automatically discharged under your Chapter 13 general bankruptcy discharge order. So, unless you file an adversary proceeding in which the bankruptcy court concludes you met the undue hardship standard, your student loan(s) will remain a debt you must repay following bankruptcy.

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What is a Chapter 13 bankruptcy plan?

A Chapter 13 bankruptcy plan is a reorganization plan detailing how you will pay some or all of your creditors. A typical Chapter 13 plan lasts three or five years, during which you make... Read more >

A Chapter 13 bankruptcy plan is a reorganization plan detailing how you will pay some or all of your creditors. A typical Chapter 13 plan lasts three or five years, during which you make monthly payments to a court-appointed representatives, called a trustee, under a court-approved plan of reorganization. That trustee distributes plan payments to your creditors as scheduled in your Chapter 13 bankruptcy plan.

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