Do I Qualify For A Student Loan Discharge By Filing For Bankruptcy?
Many of today’s young adults are struggling with overwhelming debt, and student loans are one of the worst culprits. Although some individuals manage to earn enough income to pay for a living and their student loan payments, others struggle with crippling payments in a world of high inflation and low pay.
If you’re feeling overwhelmed with debt, you may be wondering what options you have, besides putting the majority of your paycheck into massive student loan payments each month. Many people ask their Gilbert bankruptcy lawyer whether student loans can be discharged through filing for bankruptcy.
In many cases, student loans cannot be discharged through bankruptcy. However, filing for bankruptcy can still be an effective solution for some people, because the relief from other types of debt, such as credit card debt, can bring enough financial flexibility to make it possible to meet student loan payments.
Sometimes, it is possible to get your student loan debt discharged through bankruptcy, especially if you are facing an especially difficult financial situation or unusually restrictive circumstances. Because this can be a complex process, you’re most likely to have positive results by working closely with an experienced Gilbert bankruptcy attorney who understands bankruptcy law and can help you utilize bankruptcy to the maximum benefit.
How Can Bankruptcy Help Me with Student Loan Debt?
Student loan debt can be more complicated than some other types of debt because there is no tangible asset that can be repossessed to help pay back your creditors. In some bankruptcy situations, assets such as real estate or an extra vehicle may be sold to help pay for your debts. Because student loans were intended to prepare an individual for a career by building skills and knowledge, there is no physical asset that can be used to repay the loans.
Additionally, if everyone who filed for bankruptcy was able to discharge their student loan debts, the system would face disastrous consequences. Only some people will qualify for a discharge of their student loan debts, and these individuals are most likely to be successful when they work with a Gilbert bankruptcy law office for guidance.
Who Qualifies For Student Loan Discharge in Bankruptcy?
In order to have your student loans partially or fully discharged in bankruptcy, you’ll need to meet several specific qualifications. In most cases, student loan debt discharge is reserved for people who are expected to be unable to pay off their student loans over time. You and your Gilbert bankruptcy attorney will need to prove that repaying your student loans would cause you, and any dependents you may have, an “undue hardship” even at a low standard of living. This means that you and your family will be forced to choose between repaying your student loans and surviving at a minimal standard of living. You’ll need to demonstrate that this hardship is likely to continue for the life of your loan.
Additionally, you will also need to prove that you have made every possible effort to repay your student loans in good faith. This includes bank statements or other physical proof of your intention to repay your loans.
All of these conditions can be difficult to prove. Student loan discharge in bankruptcy is generally reserved for people who have extenuating and unusual circumstances, such as the development of a severe disability that prevents them from earning the income they could previously earn.
If you believe you may qualify for a student loan discharge, discuss your situation with a trusted Gilbert bankruptcy lawyer.
How to Obtain a Student Loan Discharge in Bankruptcy
Many other types of debt, such as personal loans, credit card debt, some judgments, payday loans, past due rent, past due utility bills, and title loans, are eligible for discharge as part of bankruptcy proceedings, without any additional actions. However, student loans require a different process. Your Gilbert bankruptcy lawyer will need to file an adversary proceeding on your behalf in order to attempt to discharge your student loans. This is essentially a lawsuit against your student loan lender(s) in order to request forgiveness of some, or all, of your student loan debt. This is an essential part of obtaining discharge of your student loan debt and will be most successful if you have the advocacy of an experienced attorney.
Not everyone will qualify for a discharge of their student loans. However, filing for bankruptcy can still be an effective solution for many people. If you have other debts that are eligible for discharge in bankruptcy, you may discover that you now have greater flexibility to repay your student loans without the weight of other debt payments.
Discuss Your Options for Student Loan Debt & Bankruptcy
The experienced attorneys at Gilbert Bankruptcy Lawyers are ready to help you understand how bankruptcy can benefit you and how it can provide financial freedom from debt to help give you a fresh start. If you are struggling with overwhelming student loan debt or other debt and are wondering if bankruptcy might be right for you, schedule your free consultation with us today! We will carefully examine your situation and provide guidance on your legal options. Our team is known for providing professional, respectful, and effective bankruptcy guidance.
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