Student loan debt is a crippling burden for many students and older folks who may have co-signed loans for youthful relatives.
Unfortunately, student loan debts do not typically discharge in bankruptcy unless your specific financial situation qualifies you for a hardship discharge.
While some student loans can be discharged under certain conditions, the percentage of student loans actually forgiven in bankruptcy is very low. In fact, according to one survey, of the small percentage of cases who apply for a hardship discharge, only 40% of student loan discharge requests were granted. You may be wondering if you qualify for such relief. Continue reading to find out more, and call Winterbotham Parham Teeple, a PC at 800.400.9000 to schedule a free consultation with a bankruptcy attorney in Anaheim, CA.
Don’t Be One Of The Individuals Who Declare Bankruptcy And Then Ignore Their Student Loans.
The balance of your student loans will automatically survive a bankruptcy filing, even if you meet the qualifications for a hardship discharge. In order to have student loans forgiven, you must petition the bankruptcy court to make a separate ruling. Failure to file this extra motion, called an adversary proceeding, will mean your student loans will survive, regardless of your situation. A qualified bankruptcy attorney will be able to determine if you would be a good candidate for hardship discharge and walk you through the process if need be. If your student loans do not discharge, remember that you must make arrangements to pay them after your bankruptcy is concluded. Failure to make payment arrangements may result in the lender taking action against you without your consent. Alternatively, if a hardship discharge is not feasible in your case, and making payments directly to the lender is a struggle, you may benefit from a Chapter 13 repayment plan instead to help manage your student loan debt
So How Do You Qualify for Hardship Discharge?
You may be wondering how you qualify to discharge your student loans in bankruptcy. Most courts use a standard called The Brunner test to decide if your debts are causing you excessive hardship and should be discharged.
The Brunner test asks the judge to determine if you are unable to maintain a minimal standard of living due to your debt, whether the financial problem will persist during the full repayment period of your student loan, and whether you have made good faith efforts to repay your student loans. Using this test, the court will consider, not just your ability to make student loan payments currently, but if you may ever be in a better financial position to pay in the future and if you tried to make good faith payments in the past. You must meet all three of these factors, so it is best to speak to a bankruptcy attorney before proceeding.
Do You Need A Bankruptcy Attorney In Anaheim, CA?
Please contact Winterbotham Parham Teeple, a PC at 800.400.9000 for more information on using bankruptcy to discharge any type of debt, including credit card debt, medical bills, payday loans, and even educational loans.