Do student loan and Pell Grant proceeds count as income for Chapter 7 means test?
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Do student loan and Pell Grant proceeds count as income for Chapter 7 means test?
Asked on May 24, 2012 under Bankruptcy Law, Idaho
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
A loan is not income. Period. It must be paid back so it is not a true asset. Now, as to the issue of the debt itself, quite a few years ago the bankruptcy laws went through one significant change and that was students could not discharge student debt (student loans) unless there was a very limited scope of hardship. Most people do not qualify for the hardship. Now, if you have not yet filed bankruptcy consider if this is the only reason you are filing and if you can simply seek a better option with your loans like a forebearance or longer repaymnt schedule.
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