Illinois Bankruptcy Lawyers - Student Loans

11 U.S.C. 525 provides (c) (1) A governmental unit that operates a student grant or loan program and a person engaged in a business that includes the making of loans guaranteed or insured under a student loan program may not deny a loan, grant, loan guarantee, or loan insurance to a person that is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, or another person with whom the debtor or bankrupt has been associated, because the debtor or bankrupt is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of a case under this title or during the pendency of the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.

Illinois Bankruptcy Lawyers - In Practice

In summary, student loans should not be denied, unless a prior student loan was charged-off, or is subject to charge-off in a pending case. Realistically, the protection provided by the Code is grossly ineffective, and bankruptcy lawyers normally advise clients to expect denial of all credit while a case is pending, and further, for at least 24 months following discharge. These bankruptcy lawyers are conservative.

Requirements for discharge and confirmation are complex. Bankruptcy lawyers must carefully construct a financial history for each client before recommending any course of action. Because financial histories are unique, available options under the Code vary. Also, bankruptcy lawyers frequently arrive at different conclusions regarding available options, based on each bankruptcy lawyer's level of experience and expertise. All debtors who have questions regarding discharge and confirmation through the Illinois federal court system should compare the advice of several bankruptcy lawyers to establish the range of options available.

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