Consolidating student loans bankruptcy
For example, the bankruptcy court might decide your actions are in bad faith if you file bankruptcy only a few months after taking out the loan.
In some cases, you may also be eligible for partial or complete loan forgiveness if you work in public service. However, in an effort to make sure everybody “gets it,” we’ve oversimplified the equation. “Good” debt is “good” because it’s used by appreciating or income-producing assets like a business, real estate, or an education.In that case, depending on your circumstances, you may be allowed to discharge the loan.You’ll need to discuss the issue with your bankruptcy attorney.As we learn about personal finance, writers and experts drive home one point again and again: debt is bad. I don’t like the terms good and bad because it’s hard to call any debt “good.” A debt may not be bad, but it’s never “good.” There’s bad debt, and there’s debt that’s OK to keep around because you’re using it as leverage to build more wealth than you could without it. If held to an answer, I tell most people Which one would you pick? But by paying off your student loans early, you’re choosing investment B.As soon as you make a big loan payment, that cash is gone…you can’t use it for anything else: emergencies, a new home, an investment opportunity, etc.
Because the debt consolidation loan was used to pay off your student loans, the new loan will be considered “educational debt” and fall under the strict bankruptcy rules that state that you can’t discharge educational loans unless you can prove that paying them will cause undue hardship.