If you are currently in debt, you may feel as if nobody is looking out for you. With the number of debt collectors calling you seemingly non stop, and the threatening letters arriving in the mail, it can be especially stressful and daunting. Thankfully, federal laws and codes protect you from being discriminated against or treated poorly due to your level of debt if you file for bankruptcy.
Section C of 11 US Code 525
11 US Code 525 details protection against discriminatory treatment for individuals who file for bankruptcy. It covers what is illegal in regards to how you are treated due to your debt. Section C is specific towards individuals looking to receive a student loan or grant. If you currently are looking at returning to college, starting college or helping a child qualify for a student loan, you may wonder if you can qualify based on current credit and debt. While interest and repayment plan terms are not set in stone, how financial institutions treat you is.
Section C, part 1 indicates you cannot be denied a student grant, loan, loan insurance or a loan guarantee based on current debt or if you have filed for bankruptcy. 525 prevents discriminatory treatment for debtors from obtaining student loans or being fired from employment. Federal statutes/agencies that protect debtors include: The Fair Debt Collection Practices Act and the Credit Reporting Act, as wells as the Consumer protection agency.
What is a Student Loan Program
Some individuals attempt to apply for small, personal loans when they just need a few thousand dollars for school. A personal loan does not fall under the student loan program definition, in which case 11 US Code 525 Section C does not pertain to the loan. According to 11 US Code 525 Section C Part 2, a “student loan program” is any program that operates under title IV under the Higher Education Act of 1965. It also covers similar state or local programs that fall under state or regional laws.
If you have been applying for student loans and believe you have been denied due to current debt or a past bankruptcy, it may be time to consider legal representation. You have every right to better yourself. Contact The Law Office of Larry Karandreas today.
This blog is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this blog. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.