Brookesmith, TX Bankruptcy Law Firms & Lawyers

It is never a good idea to bank where you have any other credit obligation. And, warning, creditors lie to obtain payment from you. I do not believe the bank can offset your account if all funds are traceable to child support/Social Security benefits, but why take the chance? Change banks.

A chargeoff is merely a bookkeeping entry.  It has nothing to do with whether or not you still owe a debt, or whether the creditor can take collections actions on it. Student loans are generally not dischargeable in bankruptcy.   You can seek an "undue hardship" discharge of the student loans by filing a complaint in your bankruptcy case, but the criteria you need to prove for this is very difficult. There are also non-bankruptcy alternatives, such as doing income-based repayment plans, but you have to get your loans out of default first in order to take advantage of such programs. I suggest having a consultation with a bankruptcy attorney in your area who is experienced with student loan litigation, to evaluate your options more fully. Mark Markus has been practicing exclusively bankruptcy law in California since 1991.  He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization,  AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.  

There is no way to predict how this will affect your credit. The more important question is will signing a deed in lieu open the door for the lender to be able to sue you? Your discharge closed that door, but any new contract after the bankruptcy may re-obligate you for some or all of the debt. I don't recommend to my own clients that they do either a deed in lieu or a short sale after they file for bankruptcy protection. Instead I tell them to let the property foreclose.