Can Bankruptcy Help With Student Loan Debt?
Paying student loans long after you have left college behind can make you feel constant stress and affect your emotional well-being. Fortunately, there are ways to find relief when your financial situation becomes too much to bear.
When paying your student loan has affected your life adversely, filing for bankruptcy can be an option. It is vital to seek legal assistance when considering this option mainly because filing for bankruptcy to forgive student loans is one of the most challenging endeavors compared to other types of debt.
If attempting to get student loan debt discharged through bankruptcy, it is crucial that you work with a skilled bankruptcy attorney. The Bankruptcy Code does not allow many exceptions and has laid out strict requirements that you must meet to be eligible.
Undue hardship
Experiencing undue hardship is when paying off the student loan has become a significant obstacle in an individual’s living conditions. In bankruptcy, an adversary proceeding can prove undue hardship. Undue hardship is experienced when the quality of life of a person is below decent living conditions.
A borrower’s standard of living
A borrower’s standard of living is a critical consideration in filing for bankruptcy related to student loans. If the court deems that paying the student loan has pushed the borrower to live below the minimal standard of living, there can be a good chance of debt forgiveness.
An effort to pay in good faith
Another essential consideration for the court to approve a student loan bankruptcy is the borrower’s effort to pay the debt in good faith. This means that the borrower did what they could do to pay off the loan but just happened to reach a circumstance when credit payment has become challenging to the point of undue hardship.
Every situation is unique, however, so it is wise to seek the guidance of an experienced legal professional. In many situations, individuals find that bankruptcy helps eliminate the unsecured debt that can elevate their ability to pay the remaining secured debt, such as student loans. Discharging student debt is rare, and discussing your financial situation with an attorney as soon as possible is important.