Does Anyone Know Why Edfund Says On Loan Default Form That You Can Dissolve It In Bankruptcy?
Ok, so theirs this form they send in the mail to people who are behind on loan payments, that says check one of the following boxes, one of them is , ‘This loan was discharged in bankruptcy’ , but is EDFUND a federal loan, that cannot be dissolved in Bankruptcy? The student is thinking of declaring bankruptcy but was under the impression that this could not be dissolved in Bankruptcy? Does anyone have a clue? Do federal / non federal student loans dissolve/ or do not dissolve, in bankruptcy? Or what is the deal?
Tags: Anyone, Default, Dissolve, Does, Edfund, Form, Know, Loan, Says, That
February 17th, 2010 at 4:47 pm
EDFUND is a guarantee agency for student loans. It is based on California but can operate nationally.
Federal student loans may not be discharged in bankruptcy. Period. Years ago, it was possible, but the laws changed a long time ago on that. Loans like that would likely no longer be around and would not have existed at all since EDFUND was founded.
There are other loans (private student loans) that are not federally guaranteed and those can be bankrupted.
“Student loans” that are not government-backed can be bankrupted. Government-backed loan can be bankrupted. So it depends on what sort of loan is being discussed.