Student loan debt and bankruptcy The topic of student loan debt and bankruptcy: most every bankruptcy and personal finance related website out there has written about it on numerous occasions. In fact, I authored a comprehensive post on the subject just a few weeks ago for this site. However, the rules are worth repeating because it [...]
Why Not Student Loans? In the famous decision, Local Loan Co. vs. Hunt, the Supreme Court summed up the relatively simple policy behind our bankruptcy laws: the ”honest but unfortunate” debtor is given the opportunity to start over, “unhampered by the pressure and discouragement of preexisting debt.” The idea of periodic debt forgiveness is ancient, appearing numerous [...]
The Limits of Bankruptcy Relief Under the right circumstances, filing for bankruptcy can provide great relief to a family or an individual struggling with debt. Assuming you qualify, chapter 7 bankruptcy can completely eliminate credit card debt, medical bills and afford an opportunity to get out from under a troubled mortgage. However, bankruptcy relief is [...]
It is not unusual in my practice to see student loan debts well in excess of $100,000 and clients that have minimal prospects for ever paying back the debt. Since the standard for discharge of these debts in bankruptcy is so high (see article below), often I find clients who have resigned themselves to owing [...]
New Program for Repayment of Federal Student Loans Student Loan options are few and far between for those with more debt than they can afford. Bankruptcy options are also quite limited for those in districts setting the “undue hardship” hurdle too high. Before we get to the light at the end of the tunnel student [...]
I have heard that you cannot discharge Student Loan debt in bankruptcy. Is this really true? Can it be discharged under any circumstances?
Student Loans Generally Not Dischargeable Under the bankruptcy code, student loans are generally NOT dischargeable. This means that if you have student loans and file bankruptcy you will continue to be liable for the full payment of these obligations in most cases. Unfortunately, courts do not really care about the amount of your student loan [...]