Bankruptcy is Good For Many Things: Mortgage Loan Mods, EIDL, SBA, Unforgiven PPP Loans and Finally Now Federal Student Loans!

Bankruptcy is not only for discharging credit cards!

New DOJ procedures allow us now to discharge federal student loans attesting to an undue hardship.  We are co-presenting a webinar for the American Bankruptcy Institute on February 27 outlining this new program and helping our colleagues identify clients who may be eligible and learning how a bankruptcy filing can now discharge federal student loans.

Also, folks are receiving notices to begin repayments of EIDL, SBA or unforgiven PPP loans.  Most of those loans are pretty sizable and can easily be discharged in a bankruptcy.  We don’t recommend waiting to file.  As it stands now, we don’t expect any challenges that these loans were fraudulently obtained, but that could change with a future administration.

Lastly, mortgage loan mods are far easier to obtain in bankruptcy to avoid a foreclosure.  Foreclosure filings are on the rise, and it’s usually best to handle loan mods and other home retention options in bankruptcy court rather than trying to defend a case in state court.