Legal Question in Bankruptcy in California

Re: Ch. 7 taking back payments on student loans

It would be a good idea to make minimum monthly payments on your student loans. You should discuss bankruptcy strategies with an attorney before filing any documents.

Re: Ch. 7 taking back payments on student loans

No judgments will be made based on whether you're making your minimum payments on your student loans ... they are not dischargeable anyway.

If you paid, say, $5,000 or more toward your student loans within 90 days of filing your BK, it's possible that a Trustee might treat that as a "preference" payment which he would then have the power to retrieve and redistribute pro rata to all your creditors.

Re: Ch. 7 taking back payments on student loans

I would suggest that you return to making no more than the minimum payment until you file. You are correct that the additional payments might be seen as a preference (a payment made preferentially favoring one creditor over your others), and the court might move to avoid them and recover the additional principle paid down from the student loan lender, but given the amounts involved, they probably will not pursue it.

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