Legal Question in Bankruptcy in California

Re: Bankrupty, Los Angeles California

Student loans, generally, are not dischargeable under any chapter of the Bankruptcy Code unless the borrower can show "substantial hardship."

A student loan can be discharged or modified in a hardship proceeding. This is an adversary proceeding and requires the filing of a Complaint to Determine Dischargeability. A discharge will be granted if proved that repayment of the loan will create a substantial hardship on the debtor/borrower and his or her family.

The hardship standard is generally interpreted to mean that the debtor cannot maintain a minimally adequate standard of living and repay the loan at the same time. Further, it also requires a showing that the conditions that make repayment a hardship are unlikely to improve substantially. This is a very difficult standard to meet, so you'll need to consult a bankruptcy attorney for further information.

Re: Bankrupty, Los Angeles California

You also asked about your parents. Because they are cosignors, they are liable to the same extent that you are, in the event that you do not make your payments.

Because your bankruptcy will not discharge your parents from their obligations to pay as guarantors, because bankruptcy has a lasting negative effect on your credit, and because bankruptcy may not discharge your obligations to pay your student loans, bankruptcy may not be for you. If you have other, contributing financial problems, then an in-person consultation with a bankruptcy attorney is appropriate.

I recommend you contact Sallie Mae and explain your problem. You may have options about which you are not yet aware.

Good luck!