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Bankruptcy
Bankruptcy
Typically, you do not have to make payments on your loans if you are in an active bankruptcy proceeding. However, it is possible that another responsible party (co-signer/co-borrower/co-maker) would be required to make payments during a bankruptcy proceeding, assuming the (co-signer/co-borrower/co-maker) is not also in an active bankruptcy proceeding. If PHEAA services any loans for you that were originated after you filed your bankruptcy petition, these 'post-petition loans' would continue to be billed and these payments would be due.
Yes, you are able to make payment on your account at any time; however, no payments are required for the loans covered in your bankruptcy petition, and we will not bill you once we are notified of your active bankruptcy proceeding.
Payments would be applied toward any outstanding interest first, and then towards principal. Interest continues to accrue even during a bankruptcy proceeding. Learn how payments are applied if you make them during this time.
In accordance with the amended law, Title 11 U.S.C. Section 523 (a)(8), educational loan debt is only dischargeable when the debtor proves undue hardship through adversary proceedings in a court.