Can You Get A School Loan If You Filed Chapter 13 Bankruptcy
Having a bankruptcy history to your credit report can worry you about getting hold of a school loan. However, there is little reason to do that as federal financial aid can help you in this phase immaterial of your credit history. |
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Filing for bankruptcy under the terms of Chapter 13 makes you pay back your debt in the next three to five years. After the completion of this period, the judge discharges the remainder of your balance to the unsecured debt of yours.
Now, school loan under federal financial aid takes your need, and not your creditworthiness into account. That means even if you have a bankruptcy in your past, you are still eligible for an education loan provided your need is justified. The federal PLUS loan is an exceptional type of loan that is offered only to your parents for funding your education fees.
There is also the option of getting a private students loan, but based on your bankruptcy history, you might be asked to pay up more interest than usual for it. It will also not have the protections that come with federal student loan programs.
If you are still repaying your old debts under Chapter 13 of bankruptcy, then, prior to applying for the school loan, you will need a written permission from the concerned bankruptcy trustee first. This holds true for any other type of loan too, as stated in the federal law. Failing to meet this law may result in cancellation of your Chapter 13 repayment program.
A final note of caution for all those thinking about applying for school loan post bankruptcy is that it is a risky process. As hard it is to get an approved student loan after you have filed for bankruptcy once, this particular loan needs to be cleared even if bankruptcy needs to be filed by you again in the future.
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Laws related to bankruptcy are probably one of the most complicated and diverse. There are so many aspects and factors to consider before, while and even after filing for bankruptcy. One such thing to look out for is the chances of dismissal of your bankruptcy petition. If certain factors are found in your application and the related documents for bankruptcy, it stands a chance of being dismissed by the judge.