Legal Question in Bankruptcy in California

Effect of Bankruptcy on Student Loans and Auto Loan

I am researching the effect that a bankruptcy will have on me in my current situation. I am a single recently unemployed mother of two and a student at UC Davis. With the outstanding debt that I am facing as well as the rent, etc., I am looking into the possibility that filing bankruptcy may provide some relief for me. I have about $12,500 in credit card/loan debt which includes my computer, auto--which I have been paying on for 3 of the 5 years on the loan, as well as $11,000 in student loans. Q: Will bankruptcy cover both my student loans and other debt? Q: Will my car be reposessed? (I need it to be able to work!) Q: What about my childrens' bedroom furniture which I have purchased on credit?


Asked on 3/11/98, 11:28 am

2 Answers from Attorneys
Ken Koury Kenneth P. Koury, Esq.

The answers vary

Generallly, student loans are not dischargaable but credit card debt is. It is possible to keep the car. The car is likely a secured debt so you will have to continue payments. The furnature will depend on wether is is a secured debt or not. if it is secured, then you could probably pay it off for something less than you actually owe.

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Answered on 3/17/98, 11:23 am
Mark Markus Law Office of Mark J. Markus

Effect of Bankruptcy on Student Loans, etc.

Student Loans are only dischargeable under certain circumstances (please visit my web page--address below--for more details). The credit card debt will likely be dischargeable depending on how the debt was incurred. You should be able to keep your car under the facts you give without any problem, as long as you keep up the payments. The furniture you purchased on credit you should also be no problem to keep, unless you purchased it with a store credit card, which may be secured (in which case you would have to pay the current fair market value of the items).I suggest you visit my web page and if you need further assistance feel free to give me a call for a more comprehensive consultation.

Best Wishes, Mark

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Answered on 3/17/98, 11:56 am


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