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HomeBankruptcyTampa Scholar Mortgage and Chapter Legal professional Weblog — January 19, 2023

Tampa Scholar Mortgage and Chapter Legal professional Weblog — January 19, 2023 the brand new provisions permitting a Debtor to attest to an undue hardship, a consolidation pre-filing could be seen as proof of excellent religion – that is the field that could be checked:

  • partaking meaningfully with a 3rd get together they believed would help them in managing their scholar mortgage debt.

Additionally, there may very well be issues if a consolidation is later completed after submitting as this might create a brand new post-petition debt that the Courtroom could not be capable of discharge successfully.  As all the time, please seek the advice of with a chapter and scholar mortgage legal professional as this will get sophisticated and you might be often speaking a few very massive debt and don’t need to make any errors.  Right here’s the case regulation for the above assertions:

It’s settled that, the place a debtor incurs scholar mortgage debt pre-petition, however then enters right into a post-petition settlement to consolidate that debt, the consolidation settlement extinguishes the pre-petition debt and provides rise to new, post-petition debt. See, e.g. Hiatt v. Indiana State Scholar Help Comm’n, 36 F.3d 21, 23–24 (seventh Cir.1994) (holding that the consolidation of scholar mortgage debt extinguished the prior obligation and gave rise to a brand new obligation as of the time of consolidation); Academic Credit score Mgm’t Corp. v. McBurney (In re McBurney), 357 B.R. 536, 538–39 (ninth Cir. BAP 2006) (adopting Hiatt’s reasoning and holding {that a} post-petition scholar mortgage consolidation provides rise to a brand new, post-petition obligation); Rudnicki v. Southern School of Optometry (In re Rudnicki), 228 B.R. 179, 180–81 (sixth Cir. BAP 1999) (agreeing with Hiatt that “a consolidated scholar mortgage is a brand new mortgage”).

Grubin v. Sallie Mae Servicing Corp. (In re Grubin), 476 B.R. 699, 283 Ed. Legislation Rep. 958 (Bankr. E.D. N.Y. 2012)


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