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Tackle the different types of student loan debt

Enhance your practice by assisting new and past clients with student loan debt.  Explore the Student Loan Analyzer tool in Best Case Bankruptcy 26, which helps you analyze your client’s situation and provides you next steps. The Student Loan Analyzer provides three solutions, on how to tackle the different types of student loan debt.

Dealing with non-qualified loans and dischargeability:

1. Review the template complaint, and add any additional facts that you feel will assist your client.

2. If the bankruptcy proceeding is still open, file the complaint as a separate adversary proceeding.

3. If the bankruptcy proceeding is closed, file the motion to reopen.

4. Once you file the complaint, the court will generate a summons. Serve this summons and complaint upon the named defendants.

5. Once the defendant files its answer, file the motion for summary judgment seeking declaratory relief that the debts are not encompassed by section 523(a)(8).

6. Attend the oral argument. Wait for the ruling.

Demonstrating undue hardship with qualified loans:

1. Review the template complaint, and add any additional facts that you feel will assist your client.

2. If the bankruptcy proceeding is still open, file the complaint as a separate adversary proceeding.

3. If the bankruptcy proceeding has closed, file the motion to reopen.

4. Once you file the complaint, the clerk of the court will generate a summons which will appear on the docket. Serve this summons and complaint upon the named defendants.

5. Hold your 26(f) conference, and serve discovery requests on the defendant.

6. Defendant will also serve discovery requests upon your client. Generally, you will need your client to locate the following:

A. Tax returns for last 3 years;
B. Paystubs for last 12 months;
C. Bank statements for last 12 months.

7. Confer with opposing counsel about settlement opportunities. At a bare minimum, even without good facts, you should be able to get the creditor to stop all further interest and put your client on a reasonable monthly payment.  Where you have good facts but are weary of the trial, work to get the principal cut in half with no further interest, and release for the co-signor.

8. If no settlement can be reached, complete discovery and prepare for trial.

9. Remember, it is the creditor’s burden to prove the debts fall within Section 523(a)(8) BEFORE you have to prove undue hardship. Make the creditor prove this!  Do not stipulate!

Understanding options with counseling services:
Although a loan may not be dischargeable, there are some options for a debtor to reduce the financial stress on them, including renegotiating payment plans, consolidation, and loan rehabilitation. Many of these tasks can be done by the debtor themselves, by the debtor working with a student loan counseling service, or through a trusted intermediary like you.

Debtors can log onto the Federal Student Loans Portal to establish income-based payment plans that ensure that regular payments are appropriately sized for their income. Many Private Lenders have their own portals for loan payments and monitoring that will explain how the debtor can renegotiate their loans to establish a payment plan that works for the debtor.

Counseling services like DebtHelper.com help Debtors identify all solutions for resolving their student loan debt by providing guidance, direction, and expertise with loans of all types.

You may also wish to provide that guidance, direction, and expertise yourself, helping your client work with public and private lenders to improve their loan repayment load.


Explore the Student Loan Analyzer in Best Case