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Cosmos Human

Hypothetical Situation

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Suppose on has federal student loans only and the refinance with a private company, like SOFI, etc. I know, you lose all federal repayment programs, but...come into financial distress and need to file a CH 7. That said, can the refinanced student loans then be discharged?

 

What am I asking this? I have a former coworker who is in a real hot mess and asked me for advice. I dont want to steer him wrong. I just want to help.

 

My thinking is the loans being refinanced, arent consider a student loan, or does the loan now is considered private?

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Private student loans are nearly impossible to get discharged in a bankruptcy case. Once you role your federal with your private you loose everything related to it. Can they rehab the federal? Ask for a forbearance or income based repayment plan?

 

Sorry to inform your coworker that those private student loans are stuck with them. Are they in default of the private? Once you go the bankruptcy route they would be considered in default and the balance is accelerated and due in full.

 

Good luck to them but it wont work unfortunately. Wish it did Id had done it to get rid of my mine and my husbands.

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