As leading bankruptcy attorneys in New York, we specialize in helping clients discharge unmanageable debt, including student loan debt. If you’re struggling under the weight of student loan payments, we may be able to help you, too. Schedule your free consultation today.
In the U.S., children are taught from a young age that education is key to their future success. If they work hard, they can be admitted to a top university. And then, theoretically, they will find a lucrative, fulfilling career after graduation.
Unfortunately, that’s not always the case—especially in an economic downturn. In fact, many college students graduate with honors only to find out that securing a job in their field is much more difficult than they were prepared for. They end up taking what they can get, and while their income may pay most of the bills, they’re still saddled with crushing amounts of student debt.
If you’re struggling to pay your student loans and also afford basic necessities, you’re not alone. Data reveals that in 2019, the average borrower accrued $28,950 in student loan debt, and some owe several times that amount. As a nation, we owe even more: nearly $1.8 trillion, according to the latest data provided by the Federal Reserve.
Although the student debt crisis is bleak, there’s also some good news: Borrowers have options. If you’re struggling under the weight of student loan debt, we may be able to help you find relief. This article will explain everything you need to know about bankruptcy with student loan debt, other potential solutions and how an experienced bankruptcy attorney can help you.
Unable to pay back your loans? No one deserves to be saddled with tremendous debt just for pursuing an education. Luckily, the bankruptcy specialists at Jacoby & Jacoby may be able to help. Give us a call at (888) 452-2629 to explore your options.
Here’s the truth: In most situations, declaring bankruptcy isn’t nearly as detrimental to a debtor’s credit score as their lenders would have them believe. In many instances, bankruptcy is the lifeline that allows someone to escape from the burdens of insurmountable debt.
The goal of filing for bankruptcy is to eliminate as much debt as possible through a process called discharge. Once a debt is discharged, you are no longer required to pay it, and creditors can no longer pursue collection. However, not every type of debt is eligible to be discharged.
Individual debtors typically file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, depending on the specific details of their situation. Here are the debts that are dischargeable under one of these bankruptcies:
Some types of debt are only eligible for discharge in certain circumstances, while others can’t be eliminated at all. Here are some of the debts that are not immediately discharged through bankruptcy:
Although student loans have historically been eligible for discharge through bankruptcy, new guidelines make it easier for debtors to eliminate this debt if they can prove undue hardship.
Historically, it’s been extremely difficult for debtors to discharge student loan debt through bankruptcy. Although new guidelines should make it much easier, it’s important to note that these changes only pertain to Direct Loans and other loans held by ED, and not to FFEL, Perkins or private loans.
The new guidelines for discharging student loans through bankruptcy require debtors to complete a 10-step process in order to demonstrate undue hardship. Although it provides a viable pathway to student debt elimination, it’s not an easy process. Ultimately, bankruptcy courts consider three main factors when determining your eligibility for discharge:
If the court determines that forced loan repayment would cause you undue hardship, your debt may be eliminated or partially discharged. Or, you may be required to repay your loan, but with different terms, such as a lower interest rate.
At the end of the day, getting rid of your student loan debt won’t be easy—even if your student loans are deemed eligible for discharge. Fortunately, a talented bankruptcy attorney can make it much easier.
At Jacoby & Jacoby, we provide a number of crucial services to help your case. After evaluating your situation, we’ll determine whether bankruptcy is a viable option to you; if it is, we’ll advise you on the best type of bankruptcy for your situation and help you prepare the necessary documents. If it’s not, we can help you explore loan consolidation and rehabilitation, as well as assist with paperwork and lender negotiations.
When you’re ready to overcome your student loan debt and take control of your finances, getting started is simple. You can contact us online to schedule a free case evaluation or give us a call at (888) 452-2629 to speak with a bankruptcy attorney today.
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