Legal Question in Bankruptcy in California

Dischargeability of student loans

I filed a bankruptcy petition in August 1995 (Chapter 7) that was granted in November of that year. The only debt not dixcharged in that bankruptcy was my student loans (@ $42,000 at that time). I have since been unable to repay them due to a minimum payment due of over $500 per month and interest of nearly that amount. The loans are currently due to enter collection which will impose a fee of 18.5% (@ $10,000) and then handed to a collection agency which will impose another 18.5%. That will leave the total due somewhere around $72,000 and a minimum payment due of nearly $1000 per month. My question is: is it possible to amend my previous bankruptcy petition and ask for a discharge of this debt for hardship reasons or can I file a new chapter 13 petition and establish some sort of payment schedule I can keep. The state has been unwilling to negotiate anything without a payment of 10-20,000 upfront, which I do not have. My current income is about $1480 a month (pre tax). Any payment over $150 per month would most likely leave me in default again very shortly. I have only a few other bills totaling about $1000 monthly, including rent.

Any help or advice would be greatly appreciated.


Asked on 9/25/97, 12:17 am

1 Answer from Attorneys
Mark Markus Law Office of Mark J. Markus

Dischargeability of Student Loans

The time for seeking hardship in your chapter 7 was within 60 days following your meeting with the Trustee. After that, it is time barred. As for filing a Ch. 13, you could do that so long as you can fully repay the student loan within 5 years maximum from your disposable income. I haven't heard of a hardship action being brought in a Ch. 13, but it may be possible.

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Answered on 9/25/97, 11:58 am


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