New Hampshire residents may be interested in learning more about the effects that Chapter 7 bankruptcy can have on certain private loans. Some of these loans may be discharged by Chapter 7 bankruptcy in as little as three months, and debtors won’t face any tax liability for the discharge. Debtors may be relieved to learn that lenders are no longer able to recover an outstanding balance once the statute of limitations has passed.
The statute of limitations on many private loans ranges between three and 15 years. With some private education loans, students may be absolved of the debt within a month’s time. If the institution is not accredited, then Chapter 7 bankruptcy may discharge the unpaid debt immediately. Students who attended trade schools and trade schools are most likely to have of a loan that can be discharged through bankruptcy. Debtors who attended flight schools may also have loans that are similarly structured.
These loans are typically discharged because the funds were not used or a qualified education expenses if the school was determined to be an education institution that did not qualify for eligibility. In order to qualify as a private education loan, the transaction must meet standards concerning attendance and incurred cost of attendance as defined by Section 2211 of the Internal Revenue Code. Otherwise, the transaction must’ve been made as a part of a nonprofit or government student loan program.
Debtors who need help managing unpaid education loans typically benefit from consulting legal counsel. Lawyers may be prepared to review the debtor’s financials and help determine the most advisable course of action moving forward. Legal counsel may be able to stop creditor harassment and wage garnishments while the bankruptcy process is underway. Debtors who are interested in retaining specific assets may benefit from asking legal counsel about filing Chapter 13.
