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FSU / Controller's Office / Student Financial Services / SFS For Students / Bankruptcy
Bankruptcy
Bankruptcy
Debts owed to the University may not automatically be discharged in Bankruptcy.
Debts owed to the University may not automatically be discharged in Bankruptcy.
Recent changes in the United States Bankruptcy Code have indicated that educational loans are excepted from discharge regardless of how long they have been in repayment. The change applies to bankruptcies filed after October 7, 1998. This is now equally true in Chapter 13 cases as well as Chapter 7 cases. Upon successful completion of a Chapter 13 plan, any remaining outstanding balance will be non-dischargeable.
Exception to discharge:
Pursuant to section 523 (a) (8):
(a)"A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an idividual debtor from any debt--
(8) unless excepting such debt from discharge under this paragraph would impose an undue hardhsip on the debtor and the debtor's dependents,
for--
(A)
(i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or
(ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or
(B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;"
For additional questions, please contact Student Financial Services at (850)644-9452.