Student Loans & Bankruptcy
If you are considering hiring a bankruptcy law firm to assist you in discharging student loans, then bankruptcy is most likely not the answer that you are looking for to get rid of your student loans. Generally student loans are not discheargable in a chapter 7 bankruptcy or chapter 13 bankruptcy barring a showing of extreme undue hardship. There are 3 factors among others that may be considered in proving undue hardship and they are:
(1) Will repaying your student loans prevent you from maintaining a minimal standard of living?
(2) Will it be difficult for you to maintain your minimal standard of living over the repayment period?
(3) Did you make an effort to repay the loan before filing bankruptcy. Have you been repaying your loan for at least 5 years?
Generally if there is any way you can make contributions towards paying back your student loans they will most likely not be discharged. Further student loans are not automatically discharged just because you list them on your bankruptcy petition. You would have to file an adversary bankruptcy case which is litigation where you have to sue your student loan lender and prove that you should be allowed to discharge your student loans and you will most likely have to go through a trial. This can be expensive and lot of work for your attorney so that is something to consider.
If you are struggling with your payments you should consider getting a deferment on your loans or signing up for certain government programs if you have federal student loans. One such program is the governments Income Based Repayment (IBR) program where you only have to pay up to 10% of your discretionary income per month and if you make payments for 20 years the debt becomes forgiven. You can even go on this program if you are unemployed and make $0 payments every month and get credit for that. Further going on a government repayment program prevents you from defaulting on your loans which would affect your credit score.
If you have additional questions regarding the ability to discharge your debts through bankruptcy, give Symmes Law Group a call today at 206-682-7975