Legal Question in Bankruptcy in New York

Debts

Here is my situation. I filed chapter 13 bankruptcy in 2002. It is discharged. My student loan payment were put on hold at the time, but what I didn't realize was that interest was still occurring. Now I have accumulated $45,000 in interest and my student loan is now over $100,000. After a hard winter with heating oil, I ended up taking out 5 pay day loans to pay for heat and food for my family. My was on social security with a mental illness but was cut off as soon as we got married. She now owes SSI $5000 and has other outstanding accounts. I just don't know what to do anymore and trying to make student loan payment is impossible. I got a hardship forbearance, but that is not really a solution. I thought about filing Chapter 7 again, but student loans are only discharged under certain circumstances. I have a job and work hard but I feel as though I will never get even and get a fresh start, own a home or have a decent car. Its a struggle each day for my wife and I to put food on the table for our children. We are good people who are almost in the middle class section. Is there any advice on how to get through this Problem.

Thank you.


Asked on 5/09/08, 1:38 pm

1 Answer from Attorneys
Nancy Delain Delain Law Office, PLLC

Re: Debts

You're in a tough situation.

You're right: in general, student loans are not dischargeable in bankruptcy. It's a pity you didn't realize that interest would continue to accrue on outstanding principal through the bankruptcy proceedings.

Sounds to me like you and your wife need to both have a chat with an attorney who practices bankruptcy law, but before you go calling a pricey private attorney, call your county's Legal Aid Society (every county in NYState has one) and see if you qualify for their (free or low-cost and really excellent) services. Note that this is NOT charity; these lawyers are paid, generally by grants funded by the interest that is collected every month from the escrow accounts held by attorneys.

DON'T try representing yourselves in a bankruptcy with your complexities; get the help of a lawyer. The law has changed dramatically since 2002 and you can really shoot yourself in the foot by screwing something up.

Good luck.

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Answered on 5/09/08, 10:18 pm


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