No. That’s the simple answer. If the loan is either funded or guaranteed by the government, you can’t be denied your right to get such a loan simply because you filed for, or were a debtor in a bankruptcy.
In most cases, getting loans immediately after filing for bankruptcy can be difficult, or you can end up paying higher interest rates. But a specific provision in the Bankruptcy code- 11USC§525 (c) – makes it unlawful for an entity to deny a loan to anyone because he or she is or was a debtor under the Bankruptcy Act.
The provision in the code even extends to persons “…with whom the debtor or bankrupt has been associated” (11 USC §525(c)) if the denial was because of the bankruptcy.
Student loans are not necessarily a good way to fund anything, but sometimes they are the only avenue to a decent education. At least a previous bankruptcy action won’t keep you from getting one if you need it.
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Last modified: October 11, 2009