For millions of Americans, taking out student loans to pay for college is as much a rite of passage as buying their first home was for their parent’s generation.
Unfortunately, due to the economic meltdown of the last few years, many college graduates have not found the high-paying jobs they were dreaming of when they acquired their student loans.
Instead, far too many have found themselves either unemployed or under-employed while suffocating under a mountain of seemingly intractable student debt.
When this happens, bankruptcy may be your best option to get back on financial track.
Contrary to popular misconception, student loan debt can be reduced or eliminated entirely under bankruptcy.
However, it’s not an easy process, and will need the steady hand of a bankruptcy attorney to be done successfully.
To eliminate student loan debt as part of a personal bankruptcy, you will need to demonstrate that continuing to make student loan payments would cause undue hardship to you and your immediate family.
This means that making student loan payments would not allow you to also maintain a reasonable or minimal standard of living for you and your dependents.
You will also need to show that your current economic state is expected to continue for some time, namely that you do not anticipate any great improvement in your financial situation in the foreseeable future.
It is also important to your case if you can show that you have made a good-faith effort to repay your student loans. A debtor who has made their best efforts to repay their debts have a much easier time in any bankruptcy proceeding.
If you can successfully prove undue hardship, your student loan debt can be completely discharged.
However, it is important to keep in mind that different jurisdictions may
have a different opinion on your specific situation.
Because of this, bankruptcy should never be considered without first discussing your specific situation with an experienced bankruptcy attorney.
Contact us for more information.