Student Loan Bankruptcy
Can Student Loans be discharged in Bankruptcy?
Student Loan Bankruptcy only applies your student loans creates an “undue hardship” for you and your family. If you can prove to the bankruptcy court that you’re only earning enough to pay for a “minimal standard of living”, meaning you can’t afford cable, Internet or a personal cellphone, then you have a chance. You also have to prove that your finances aren’t likely to get better anytime soon. It helps if you were able to make at least a few payments on a monthly basis, this shows the court that you have been trying to be diligent to your dues.
File Adversary Proceeding to Discharge Student Loans
A hardship discharge won’t happen automatically when you file for bankruptcy. Our attorneys normally file an extra petition, which is called an Adversary Proceeding. This document basically asks the court to make an exception in your case since the standard rules prevent loans to be erased.
Chapter 13 Bankruptcy and Student Loans
When Chapter 13 bankruptcy instead of Chapter 7 is filled, you agree to pay off your debts over a period of three to five years. The court will supervise your payments, and your student loan lenders won’t be able to demand the whole loan due at once. At this point, each month, you give your bankruptcy trustee all your extra income, and the trustee divides that money among all your creditors. This can make your overall monthly payments go down.
How our Bankruptcy Lawyer Can Help You
The law surrounding personal or student loan bankruptcy is very complicated. Each case is unique and your circunstances may vary. For more details, specific information, please contact our bankruptcy lawyers and setup a free backruptcy consultation. We can help you make the right choices and file appropriately so you’ll be likely to get approved.