Are thinking about bankruptcy, or have already filed one, but are thinking about going back to school for a graduate degree? Are you concerned about being able to get student loans? Are you worried that the bankruptcy might interfere with that?
Well, you are not alone! However, this situation does require some planning, since it depends on where the loan or financial aid will be coming from. But, in short, you do have options for student loans after bankruptcy.
What Are My Options?
Federal Loans. These loans may be beyond your reach, however. Graduate PLUS loans are credit based, so you cannot have an "adverse credit history." But what does that mean?
It means that you are more than 90 days delinquent on any debt (which you could be even before filing bankruptcy), or in the past 5 years defaulted on a debt, obtained a bankruptcy discharge, foreclosure, repossession, tax lien,wage garnishment, or write-off of a federal student loan. You may still be able to obtain the loan, but you will need a cosigner who does not have an adverse credit history.
Private Loans. Private loans from banks may still be available, but they are also based on your credit rating. Thus your bankruptcy could be a problem. However, you might have more success if you filed a chapter 13 where creditors were paid something (sespecially if they were paid in full), rather than a chapter 7 where debts were just wiped out and no one got paid.
Be aware, though, that even if you get a loan, you might not qualify for enough money or a reasonable interest rate for when you are ready to repay it. In addition, these loans do not have as flexible an array of repayment plans as Direct Loans from the federal government and are just as non-dischargeable in bankruptcy.
So What Do I Do?
If you live in southern New Jersey, are considering filing bankruptcy, and are worried about student loand for your children, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.
If you are looking for more information about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.
If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.