Student Loans during bankruptcy and after

[tazu_474]

OK so before I filed bankruptcy I was 6 months behind on my Student Loan payments to KHESLC (Student Loan People), owing ~$1,200. When I filed bankruptcy, I included them in my schedules as priority debt. I am a NO ASSET case. Next, I called them up asking for their BK department. I spoke with a woman who was very nice, and she told me to "just call back after I receive my final order and we'd work things out."

I guess until my BK is settled, they simply put my account in forebearance?

Question: when I get my final order, will they want me to pony up $1,200+ to get current again, or can I negotiate a deal to repay the loans at a different rate and/or monthly payment? I am 10+ years into my repayment and owe ~$20k

Thanks!

[StudLoanGuru]

I can't speak to the status of the loan during the bankruptcy, but as long as it is still in good standing you have options to prevent default.

It sounds like you are in the default aversion stage, which is where you aren't too far along that it has defaulted but you are behind on your payments. In this situation the goal is to "cure" the loan, or catch up on all the amount passed due. After your bankruptcy you can explore what it would take to do that, which i'm sure will include payments not necessarily all of it up front.

As far as a restructure goes, that would be a question for your current lender as to whether they have any programs avail. If, however, they do not offer anything you could get it consolidated throught the USDOE with an income based repayment plan. It will start over the payment arrangement and make it based on your income, not the balance of the loan. Be careful doing that, though, as your interest rate will go up. The general rule is if you can afford the current monthly payments then pay that, otherwise seek a restructure of somekind.