Who informs the collection agencies?
I am being harassed by a collection agency, whom I have told that I may have to file bankruptcy because I just can`t pay these like they would like. She was quite rude and to the point when she told me that every student loan this is included in a bankruptcy…when discharged ALWAYS goes back to the collection agency…my question, how is this possible and what can I say to her if she is incorrect?
Posted from: Alberta
The rules with student loans are pretty simple, if you have been out of school for 7 years (and this 7 year period has elapsed prior to filing of the bankruptcy), then you can be released from the student loans when the bankruptcy is discharged.
The key to remember is that this 7 years is measured from the last day you attended any classes. Each time someone attends school it essentially re-sets the clock.
Their is also a hardship rule that reduces this 7 years to 5, but to be able to qualify you have to demonstrate that you acted in good faith, that you are in a position of significant financial distress that is going to continue if you have to pay the student loans, and that you received no benefit to you education. This application is difficult to make as the criteria are difficult to demonstrate, but it is possible.