On SSDI (disability) but Navient will not discharge loans

I am on social security disability, considered totally and permanently disabled by the government, but Navient just sent me a letter telling me that I am not eligible for disability discharge. Has this happened to anyone else? Any advice?

I cannot afford to make payments, so it looks like I'm headed into a bankruptcy now which still might not solve the problem of my student debt.

You should talk with an attorney who knows the bottom-line facts related to your situation. In my own case, no creditor ever even tried to take my SSDI income.

Try for income driven repayment while trying for total disability discharge again.

I have my loans on an income driven plan and my payments are 0 per month. I'm also on ssdi. The payment plan can be renewed for 25 years. So they are basically discharged.

As you're finding out, student loans can not be discharged through bankruptcy. But it is very hard for creditors to get at your income from Social Security. Actually, I think it's close to impossible. (The IRS is one of the few entities that can, if you owe taxes.) Navient is figuring you may someday go back to work. Or you could come into income or assets some other way. You might win the lottery or inherit money. If you're still relatively young, they are not going to assume they won't ever get anything out of you. So the loans stay hanging over your head, just getting bigger with interest accumulating. It's tough to have that looming in the background indefinitely. Get what professional advice you can get, as suggested above. There might be a way to someday get the loans discharged.

Simple default is sometimes a viable way to deal with debt you can't make good on. My boyfriend got sick and defaulted on a large amount of consumer debt. He never did a bankruptcy, but just defaulted. He has since rebuilt his credit to where he has an above average credit score and has access to plenty of credit, some at very reasonable interest rates. The main thing is to let creditors know your only income is something they can't touch.

I have the same arrangement. The only disadvantage is you have to renew the IDR every year, even if you claim disability for the rest of your life. The paperwork isn't too bad though, you just have to stay on top of it when they tell you it's time to renew, even though they give you something like three months to get it done.

Student loans are dischargeable in bankruptcy. I know this answer is pretty late, but I was perusing PC and saw the question about student loans. Some lawyers that do bankruptcies are not aware of new laws.

Student loans are now dischargeable in bankruptcy. Two ladies, I met this fall at an agency I volunteer at were referred to a bankruptcy lawyer in our area and both were successful in discharging their student loans in chapter 13. One had close to 40,000 and the other was 2300.

Are you saying that student loan debt is now treated the same as consumer debt in bankruptcy court?

Do you understand the difference between Chapter 7 and Chapter 13 types of bankruptcies?

I've tried to find evidence of this change of law you talk about. Everything I've read says that it is still very hard to discharge student loan debt. It can be possible under circumstances of extreme hardship.

This article seems to me to reflect current law: https://lee-legal.com/2017/10/24/for...e-near-future/

Excerpt:

"Today, student loans can only be discharged in bankruptcy upon a judicial finding of undue hardship, a nearly impossible legal standard to meet."

I think the newer rules are to help those that went to those scam for-profit schools that went out of business. I could be wrong but those are the only changes I have read in the past few years. If you can get it, discharge is much better because it helps your credit rating unlike bankruptcy. Mine went up about 140 points in the last year since mine were discharged.

I realize this is an old thread but I will put this here for archival purposes(The bolded text is my doing):

I got mine done through option 1. Very straight forward with no gotchas.

With SSDI, it looks like you need to be 5-7 years from your next scheduled review. That might be the OP's issue.

If #2 fails, there is always option 3 although you have to jump through a lot more hoops and seems to have a higher bar but it is an option.

I want to add that if you get a discharge it becomes taxable income. In my case that was $81,000! However, if your liabilities exceeds your assets(including things like books and clothes along with the other usual suspects) you can qualify for insolvency through the IRS and avoid paying taxes on it. I would think most people on any government disability would have a negative financial net worth.

Hope this late information is useful.

querty68: That's a really good point about how a discharge becomes taxable income. I got a notice from a credit card issuer that they were notifying the IRS about some consumer debt I owed that they were charging off. I think they are legally forced to report it as such.

I am heartened to hear, as you report, that the government is seeking to provide some relief to those who have incurred heavy debt, financing attendance at scam for-profit schools. That is not a problem I've had, but my sympathies are with anyone who's gotten sucked in to that. I know these "institutions" of higher learning market very aggressively. I looked into getting a master's degree through a for-profit on-line school. They really lay on the "hard sell."

I recently found out that if you receive Social Security....that if your Continuing Disability Reviews are scheduled 5 or 7 years you can have your student loans discharged. But not for a 1 or 3 year CDR.

Actually if your pdoc will state that you will be totally disabled and unable to work for 60 months that also can get your students loans discharged. It worked for me but it seems like a lot of pdocs won't certify that. I don't know why if they have agreed you need SSDI.

The OP was looking at a horrific financial situation down the road. The law has not officially changed, but it is noe impossible to get relief. An empracal study that I was referred to said that ~ 1% of student loan debt is put before the courts under the mistaken belief that it is an impossibility to get relief. There is a 40% favorability rate to have most if not all student debt discharged. I don't have access to the study, but it did point out that most lawyers mistakenly tell their client they are out of luck.

Since I posted, I know of two more ladies that have filed for bankruptcy and included student debt. One is on SSDI and the other is applying for SSI. I do believe the OP might find a lawyer that is at least willing to request it in the court paper work. This is my opinion only.