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emapjlg · Aug 30, 2010, 04:41 PM

The dept of education is taking $171 monthly out of my paychecks to pay for my student loan. If I stop working and start collecting ss disability, can they take the payments out of my disability checks? I live in Wisconsin and the disability checks would be my only source of income, around $1100 month.

twinkiedooter · Sep 1, 2010, 09:56 PM

The government can and will take this money out of your SSD checks each month. They and the IRS are some of the government agencies permitted to take money out of disability checks. Don't even think of filing bankruptcy to discharge a student loan debt as that is not a dischargeable debt in a bankruptcy proceeding. And just why don't you think you have to repay this debt since you are the one who chose to take out a loan and attend college in the first place?

emapjlg · Sep 18, 2010, 03:37 PM

My response has two parts: First of all, you are incorrect... Under current law, government student loans may be dischargeable in bankruptcy but ONLY IF certain specific criteria are met (and I do meet all of the criteria, though that's none of your business). Secondly, I hope to repay all of the debt if I am able to do so. I realize the country is full of people willfully cheating the government and skipping out on their debts, but I don't happen to be one of them. I'm currently making payments on my student loans but I've recently been diagnosed with a serious illness and I'm concerned about what will happen to that debt if I end up on disability.
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Thank you, twinkiedooter, for your obviously thoughtful response to my inquiry.

twinkiedooter · Sep 18, 2010, 08:37 PM

Originally Posted by emapjlg

My response has two parts: First of all, you are incorrect...Under current law, government student loans may be dischargeable in bankruptcy but ONLY IF certain specific criteria are met (and I do meet all of the criteria, though that's none of your business). Secondly, I hope to repay all of the debt if I am able to do so. I realize the country is full of people willfully cheating the government and skipping out on their debts, but I don't happen to be one of them. I'm currently making payments on my student loans but I've recently been diagnosed with a serious illness and I'm concerned about what will happen to that debt if I end up on disability.
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Thank you, twinkiedooter, for your obviously thoughtful response to my inquiry.

Right now you are still employed. It takes sometimes YEARS to get on disability. During that interim time you will not be earning anything! Your best bet right now would be to see if you can discharge the student loan via bankruptcy. I worked in a law office for several years that filed a lot of bankruptcies for clients. I was unaware of any such changes in the bankruptcy code allowing for student loan discharges. I may be wrong about this but I'm pretty sure they are not dischargeable.

Sorry about your recent diagnosis.

JudyKayTee · Sep 19, 2010, 05:52 AM

Under the new law a person has to show "substantial hardship" in order for a student loan to be discharged - and that means that the student would be forced to live below the poverty level. Student loans in my area are being rewritten over a longer period with lower monthly payments in order to make them NOT dischargeable in bankruptcy.

Canada - if that is where OP is - has entirely different "rules."

(I was perturbed by the "none of your business" comment. Thought it was unnecessary.)