Can You File Chapter 7 on Tuition Owed to a University Without Student Loans?

Can You File Chapter 7 on Tuition Owed to a University Without Student Loans?

In most cases, a former student can file chapter 7 bankruptcy on owed expenses to a college that were not part of a student loan. If the student did not ask for a loan or execute a promissory note, the debt remains eligible for discharge in court, explains Nolo.

However, in the 21st century, some courts require that the defendant prove undue hardship. They argue the owed money created a loan from the college on behalf of the student, says Nolo. These colleges created an extension of credit by adding monthly payments, due dates, late charges and charges for the cost of collections.