If a debtor's delinquent school tuition is discharged in bankruptcy, the college/university is prohibited from refusing to release the debtor's transcript/diploma. Most of us know that student loans are nearly impossible to discharge; but school tuition is not typically considered a student loan and can be discharged during bankruptcy.
For example, if a debtor who was paying tuition at a University, dropped out and filed bankruptcy due to financial reasons, the school may attempt to hold on to the debtor's transcripts. Or, if the debtor had actually graduated, the school may attempt to withhold the debtor's diploma. However, if the bankruptcy court discharged the tuition debt, the school has no legal ground to withhold the debtor's transcripts or diploma. On the other hand, if a debtor signed a promissory note with the school, the bankruptcy court might treat this debt as a student loan.
Questions About School Transcripts and Bankruptcy? Let us Know
To find out how delinquent college tuition (or other debts) can be discharged during bankruptcy, contact
a bankruptcy attorney to set up a free consultation.