Can I Get Student Loans While in Chapter 13 Bankruptcy?

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Financial difficulties impact so many areas of life from homeownership, medical payments, and even education. For those just beginning the bankruptcy process, the idea of bettering oneself with a college degree seems like it can be out of reach. One question we often see is, “Can I get a student loan while in Chapter 13 bankruptcy?” The Columbus, Ohio bankruptcy attorney, Michael Ryan Jones, explains your options.

Can I get a student loan while bankrupt?

While this answer is somewhat loaded, it is possible to get student loans while in the middle of bankruptcy. However, it can be difficult. Under Chapter 13 bankruptcy, any new debt, including student loans, you wish to acquire must be approved by your bankruptcy trustee. In addition to the trustee’s approval, you must also conduct a plan for both the trustee and lender, answering the following questions:
  • Will the college degree impact your ability to repay your debt?
  • Will your Chapter 13 repayments and student loan payments coincide at any point?
  • Will earning the degree actually increase employment and earning potential?
  • Will you be able to repay the student loan debt?
From there, your trustee and private lender will determine if the student loans will be beneficial or hurt your debt repayments.

How does bankruptcy impact federal loans?

Much like private loans, getting a federal loan while in Chapter 13 bankruptcy can be complex. Under the Federal Bankruptcy Law, you cannot be denied federal student loans just because you are in bankruptcy. However, if you are behind on other federal loans such as for student loans, housing, etc., you could be denied a federal student loan application. But if you wish to acquire a federal student loan, talk to your bankruptcy attorney to see what you may qualify for.

Can I get a private student loan for college while in bankruptcy?

Though there is no law saying you cannot try to acquire a private student loan, the odds of a private lender approving you are slim. This is because bankruptcy does impact your credit score for some time. However, it is not a permanent decrease. Though the bankruptcy will remain on your credit history for 10 years, as soon as the discharge is given, you can begin to rebuild your credit. Remember, if you have a child entering college, this can also impact them. If you were to apply for a Parent PLUS loan, it is unlikely you will be given it while in bankruptcy. But that doesn’t mean your child will not get loans. In general, your bankruptcy history is not enough to deny your student loans.

Student Loans and Chapter 13 Bankruptcy: The Jones Law Firm

When you’re trying to better yourself following financial difficulties, you may feel like education is out of reach. However, that is not necessarily true. If you have questions about your student loan eligibility while in the midst of a Chapter 13 bankruptcy, contact The Jones Law Firm today. Attorney Michael Ryan Jones can walk you through the process of debt management while allowing you to get a fresh start. Contact us today for a free consultation.