Tag Archive: student loan


The above statement, or some variation thereof, is something that as a bankruptcy attorney I hear a lot.  And it is not really a surprise – a lot of people today find that they have a particular problem with one thing (think mortgage), but are really ok as far as everything else is concerned.  Of course, every now and then the variation on this statement goes something like “I shop at Kohl’s a lot, so I don’t want to include them in the bankruptcy, just all of the other stuff”. 

The misconception lays in the word ‘include’.  It is really not an appropriate word to use in the context of bankruptcy.  When you file for bankruptcy relief ALL OF YOUR DEBTS must be listed.  No ifs, ands or buts about it.  Just like all of your assets must be listed.  So in the sense of listing your creditors, and notifying them of your filing, everything must be ‘included.’   

Here is where it gets complicated, though.  Just because a debt is ‘included’ in the sense that it was listed on your petition, does not necessarily mean the debt will be discharged.  For example, student loans and certain tax debts are not dischargeable.  They have to be listed, and for all intents and purposes they are ‘included’…..BUT, they are not included in the debts that are discharged.  Other debts that are ‘included’ but not discharged, are those debts that you reaffirm during your bankruptcy, so you can keep the collateral (usually for a car). 

Now, if you have a credit card that has a zero balance, you do not own a debt to that particular creditor and it does not have to be listed on your petition.  It is NOT  good idea, however, to pay off that Kohl’s card so you don’t have to list it, because eventually Kohls – or whoever – will discover that you filed for bankruptcy relief, and even though you did not owe them any money at the time of your filing, they will likely either raise your APR, lower your balance, or shut down your card altogether. 

In short, EVERYTHING is included in your bankruptcy in one way or another.  Talk to your attorney to make sure you understand what this means for you.

  The discharge, in general, operates as an injunction against any act to collect an obligation of the debtor that existed on or before the date of filing of this case, with some exceptions. The discharge does not enjoin the collection of taxes not less than three years old on the date of filing for which returns have been filed, other taxes of a shorter period, the collection of student loans for which no finding of hardship has been made, or debts as to which the court has made an order of non-dischargeability.

In plain English, it is a court order that prevents all of your creditors from ever attempting to collect the debt you owed before filing – no one can ever ask you to pay on that debt again, and if they do, they can be sanctioned.  Now, there are some exceptions, as noted above.  The most common ones are most tax debts, and pretty much any student loan debts.  Finally, any debts that you reaffirmed are excepted from the discharge.  Orders of non-dischargeability as mentioned above are fairly rare – such orders typically happen when a creditor can show that you incurred a debt with the intent to discharge the debt. 

In short, the discharge is the key to your fresh start.  It frees you from the burden of debt and allows you to focus on rebuilding your financial future.