Student Loans and Bankruptcy, What you Need to Know
It’s no secret that across the United States, a growing number of graduates and young professionals are feeling the crunch of student loans. The amount of money owed on student loans, the availability of jobs, and the wages those jobs provide, have created a dangerous and unsustainable equation for many people.
Therefore, some of the common questions we hear from prospective clients are, “can I file bankruptcy on student loans?” and “does bankruptcy discharge student loan debt?” Let’s take a closer look at these issues to determine what options may be available to you.
The very short answer is that in most cases student loans are not able to discharged in bankruptcy. However, there are other people who qualify for this, and the key is a rule known as the undue hardship exception. To see if you qualify call to schedule a free consultation.
For individuals who don’t meet the necessary conditions though, the question then becomes whether or not filing bankruptcy still offers those with student loans any benefits. The answer may be yes.
If you file chapter 7 bankruptcy, you’re able to discharge other debts you’re facing, allowing you to pay back student loans. And if you file for chapter 13 bankruptcy, your monthly repayment plan is a more manageable and realistic timetable based on your finances and income, allowing you to catch up over a period of time and can also provide what is effectively a five-year deferment on your loans.
When you’re feeling a financial pinch because of your student loan debt, don’t hesitate to take action. Call Goren & Tucci at 301.977.4300, and we’ll provide you with a free consultation to discuss your case, and to determine whether or not filing bankruptcy for student loan debt makes sense given your circumstances.