You are not required to make direct regular monthly payments on your student loan(s) during the bankruptcy process unless you have provided for direct payment outside of your Chapter 13 plan. Often, your student loan creditors will be scheduled to receive a distribution from the payments you make to your Chapter 13 trustee. Regardless, interest on the student loan(s) continues to accrue while your bankruptcy is pending. When you emerge from bankruptcy, you will be responsible for any remaining student loan balance.
If you are in a Chapter 13 plan and your student loan creditor(s) is scheduled to receive a distribution from your plan payment, ask your attorney or the trustee how much of your plan payment will be paid toward your student loan(s).
To give you an idea of how interest on your student loan(s) grows while you’re in bankruptcy, this chart shows the loan balance and total accrued interest after one, three and five years. The interest rate in this sample scenario is 7%.
SAMPLE SCENARIO (INTEREST RATE 7%)
Accrued interest on student loans during bankruptcy |
Loan balance
| Accrued interest after one year |
Accrued interest after three years |
Accrued interest after five years |
$5,000 |
$350 |
$1,050 |
$1,750 |
$10,000 |
$700 |
$2,100 |
$3,500 |
$15,000 |
$1,050 |
$3,150 |
$5,250 |
$20,000 |
$1,400 |
$4,200 |
$7,000 |
$25,000 |
$1,750 |
$5,250 |
$8,750 |
$30,000 |
$2,100 |
$6,300 |
$10,500 |
$35,000 |
$2,450 |
$7,350 |
$12,250 |
$40,000 |
$2,800 |
$8,400 |
$14,000 |
$45,000 |
$3,150 |
$9,450 |
$15,750 |
$50,000 |
$3,500 |
$10,500 |
$17,500 |
If ECMC holds your loan(s) and your bankruptcy plan allows voluntary payments outside the Chapter 13 plan, you may send payments to:
ECMC
Lockbox #8682
P.O. Box 16478
St. Paul, MN 55116-0478
If you don’t know who currently holds your loan(s), find out at the National Student Loan Data System (NSLDS), the central database of federal student loan information.
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