How To Improve Your Credit Score After Bankruptcy-Part 8

Dealing With Non-Discharged Student Loans

1. A lot of filers are under the impression that their students loans are discharged just like all other unsecured debt, but this is not usually the case.
2. Occasionally I see a loan that is called a student loan but it isn’t guaranteed by the government and is really just an unsecured debt, but these are rare.
3. Government guaranteed student loans are not discharged in bankruptcy unless there is an express court order determining that a “hardship” exists like disability, age or mental impairment and the court expressly declares the student loan discharged, but this rarely happens.
4. Since the debt is not discharged the filer must take immediate steps to cure the default on these accounts or consolidate them. If this isn’t done they will be reported on the debtor's credit report as “Past Due,” “Delinquent,” or “Government Claim Filed.” This reporting will seriously impair the debtor’s credit, so it should be dealt with as soon as possible after the discharge.
5. The best practice is to pay these loans and keep them current throughout and after the bankruptcy to avoid a credit disaster.
6.  If the student loan is “deferred” or “current” but it is listed as “past due” or “delinquent” on the credit reports, the reporting should immediately be disputed with the credit bureaus.

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