Student loans and evictions – Is bankruptcy right?

Letter to “Ask Leon”

Dear Leon:
I have 12-year-old student loans, plus other debts from 7-12 years ago, plus a few medical bills and other small debts that are more recent. I also believe that there are some judgments against me from an eviction about 5 years ago. Should I file bankruptcy or should I just go hide in the woods and assume a new identity. Recently the student loan people have been calling me at my work and getting me in trouble.
Signed, Leslie

Leon Says…

Dear Leslie:
Student loans that are made or guaranteed by governmental agencies and non-profit institutions of higher learning are not usually dischargable in bankruptcy. Filing Chapter 7 won’t make sense unless you only want or need to get rid of the other small stuff. Possibly a Chapter 13 is feasible to control the pesky collection activity if you can afford to begin paying something on your debts, enough so that they get paid off within 5 years. A more serious problem for you is the eviction judgment, which can stay on your record for 10 years or longer in California. Most landlords don’t care whether or not a person has ever filed bankruptcy, but they hate to rent to someone that has ever been evicted. Other debts, such as the ones you describe as 7-12 years old, are probably now outside the statute of limitations, (which is usually 4 years in California, meaning a creditor has only 4 years from the date of your default to file a lawsuit against you), so filing a Chapter 7 bankruptcy is not necessarily worth your while. Go see an experienced attorney for specific advice, and weigh all your options carefully before you decide.