In any Bankruptcy Court, not just in Dayton, Ohio, the court will protect you from student loan creditors. Once the case is filed, the court issues what is called an “Automatic Stay”, which prohibits any creditors, including student debt collectors, from taking any action to collect the debt.
In most circumstances, the Automatic Stay will keep educational loan creditors from contacting you the entire time that the bankruptcy case is pending. In Chapter 13 bankruptcies, that period could be as long as 5 years. In that sense, student loans are treated like all other unsecured debts. However, whether student loans are discharged at the end of the bankruptcy is a more complicated issue.
It is very difficult, but not impossible, to discharge student loans in bankruptcy. In order to discharge your student loans in a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, you will need to convince the Bankruptcy Court that repayment of the student loans “will impose an undue hardship on you and your dependents.”
Different federal districts have different tests that they use to determine what the borrower will need to show in order to prove “undue hardship.” These different tests and the different courts’ interpretations make it more difficult to discharge student loans in some districts. Student loan discharge in Dayton, Ohio, is very difficult.
In order to discharge the student debt, you will need to file what is called an adversary proceeding. The issue will be litigated in the bankruptcy court, costing time and money. Most bankruptcy attorneys offer free consultations, where you can get more information about the treatment of your student loans in bankruptcy.