Bankruptcy Law/Teri loan

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Expert: - 9/29/2007


Question
Can you tell me if a Teri loan is a federally guaranteed loan. I've researched it and keep coming up with the word "guaranteed" but not "federally guaranteed". As a desperate parent I took out a Teri "student loan" (20 year repayment)in 2003 to pay for long term treatment in Utah for my then mentally ill 16 year old son. It had a variable interest rate that has gone up and up. I ended up filing bankruptcy just before the laws changed in 2005, but my lawyer was not interested in helping me discover if this loan was dischargeable or not. He told me if I thought it might not be a federally guaranteed loan "then don't pay it and see what happens". When I tried to get more information from him the response I got was "this has already been discussed". I would like to look into retiring in the next 2-3 years, but with this loan repayment looming over me for years to come, I don't see how that's possible.
Do you know if a Teri guaranteed loan is dischargeable?
Thanks for your help.

Answer
I strongly suspect it is not dischargeable. There is no requirement in the law that the loan has to be "Federally" guarantied. The requirement is that the loan was made or guarantied by a governmental unit or nonprofit institution. You can look this up at Bankruptcy Code Section 523(a)(8).

I checked Teri's web site, which state: "TERI, The Education Resources Institute, Inc., is the most experienced and largest nonprofit sponsor of private loans for education."

You might look into reopening your bankruptcy case to seek relief under the "undue hardship" discharge provision contained in Bankruptcy Code Section 523(a)(8).

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Los Angeles Bankruptcy Lawyer Leon D. Bayer

Expertise

Leon Bayer has successfully represented clients in bankruptcy for over 30 years. He is frequently called upon by the media, the California Bar and other associations to provide insight and help educate attorneys on bankruptcy issues. If you or other readers want to keep up with my blog postings about life in and out of bankruptcy, you can follow my blog at http://www.bankruptcyblogger.org/ and my personal web site at http://www.debt-relief-bankruptcy.com and A Human Guide to Bankruptcy at http://www.thebankruptcyguide.net/ Leon also writes about bankruptcy law for Nolo, see http://www.nolo.com/law-authors/leon-bayer.html and his "Ask Leon" bankruptcy law blog column at http://blog.nolo.com/bankruptcy/

Experience

Leon is a Certified Specialist in Bankruptcy Law by the State Bar of California, and has been a practicing bankruptcy lawyer in Los Angeles, California for 33 years.

Organizations
National Association of Consumer Bankruptcy Lawyers, California Bar Association, Los Angeles County Bar Association.

Publications
Author, ?The Essentials Of Chapter 13,? Daily Journal Report, December 18, 1987.
Contributing Editor, Basic Bankruptcy, California Practice Handbook, Matthew Bender 1992, 1993.
CEB Consultant, CEB-Personal and Small Business Bankruptcy Practice in California, 2003.


Education/Credentials
B.A., J.D.

Awards and Honors
President, 1995-1996-Los Angeles Bankruptcy Forum; Member - Los Angeles County Bar Association Committee on Commercial Law & Bankruptcy, 1988. Law Advisory
Commission-Personal & Small Business Bankruptcy Law of the State Bar of California, 1996-2000

MR. BAYER SAYS: The big banks and credit card companys have been working overtime for many years to undermine the Consitutional right of the American people to be able to claim bankruptcy protection. In 2005 the banking lobby successfully convinced Congress and the President to make the laws and proceedures more complicated, hopeing that it will stymie legitimate people from filing bankruptcy. They succeeded in gaining these complex new legal proceedures by greasing the legislative system with hundreds of millions of dollars in "campaign contributions." The good news for the American people is that while the new laws have made the proceedures needlessly complex to the point where inexperienced people can't help but trip over the maze of new rules and regulations, the process is still doable, especially with a lawyer who is well trained and experienced in this specialty.

Past/Present Clients
I have probably handled something on the order of about 15,000 bankruptcy cases thropughout my career.

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