One of the few pitfalls in filing a bankruptcy revolves around paying for college. This comes about in two different scenarios:
1.When you pay for your child's college- This is considered a transfer. Any transfer from the debtor to another during the four years before filing bankruptcy constitutes a transfer which may be set aside by the bankruptcy trustee if the debtor was in a bankrupt state at the time of the transfer. Thus if you pay for your child's college during the four years before filing bankruptcy, the Trustee can due the college to get the money back and your child will be left with the loan. It is important that you discuss this with your bankruptcy lawyer to see if the facts apply to you.
2.Student Loans- These are not dischargeable in bankruptcy unless you fall into the extremely difficult to prove category of undue hardship. Very rarely can undue hardship be proved. Talk to you bankruptcy attorney to see if there is any possibility of discharging this kind of debt in bankruptcy.