Legal Question in Bankruptcy in California

Bankruptcy and Student Loans

Section 525(c)(1) of the Bankruptcy Code states that "A governmental unit that operates a student grant or loan program...may not deny a grant, loan, loan guarantee, or loan insurance to a person that is or has been a debtor (in a bankruptcy) or another person with whom the debtor or bankrupt has been associated, because the debtor... is or has been a debtor under this title or...has been insolvent before the commencement of a case under this title. . ."

A parents' bankruptcy should have no bearing on their child getting a student loan. It may affect the amount of the loan, since you have to prove "need" to get the loan, and the bankruptcy may increase your asset to debt ratio (by eliminating your past debts). That's really the best answer I can give; there are always other factors and if a lending agency really doesn't want to make a loan, they can always find a way not to, but I think you should be safe. If you wish to discuss this further or need legal representation, please visit my web page (address below) and give me a call. Good luck.