swallowtail scratchily: I Filed Bankruptcy 7 Last Year Bust Still Owe Parent PLUS Loan ...

Thursday, February 14, 2013

I Filed Bankruptcy 7 Last Year Bust Still Owe Parent PLUS Loan ...

?Dear Steve,

Please help?I filed Bankruptcy 7 last year but syill have a 80,000 parent PLUS loan?I have used the unemployment deferement and will try for economic hardship next?.I just started receiving social sec for widower benefits just 800.00 a month

Shall I just default onthe plus loan and let them take 15% OR just keep deferring or using forebearance if I can?.

Thank you soooooooooooooo much!!!

Kristin?

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The Answer

Dear Kristin,

You are correct that the bankruptcy did not touch the student loan. But all is not lost.

If you do default on the student loans and they move to garnish your social security benefits you can file an appeal and state your case for a financial hardship. The garnishment will then be greatly reduced or stopped.

Social security defines financial hardship as ?We will find financial hardship when you show that withholding a particular amount from your pay would deprive you of income necessary to meet your ordinary and necessary living expenses. You must give us evidence of your financial resources and expenses.?

If you don?t have any big assets and can?t afford the payments, stop. You really don?t have any other choice, do you?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!