Many Americans are struggling with student loan debt, particularly people with private student loan debt. Unlike federal loans, private student loans do not offer debtors flexible repayment options, sometimes leaving debtors with crushing monthly payments. As a result, many student loan debtors consider bankruptcy  as an option in order to improve their financial situation. Unfortunately for debtors, changes to the bankruptcy code in 2005  made it very difficult to discharge student loans in bankruptcy. There are still some circumstances in which bankruptcy can provide financial relief, however, so anyone struggling with their student loan payments should be sure to discuss their options with an experienced Long Island bankruptcy lawyer as soon as possible. In many cases, the assistance of a lawyer may help you negotiate better repayment terms with your creditors without filing for bankruptcy, as well.
Student loans and undue hardship
In order to discharge student loans in bankruptcy, a debtor must be able to show “undue hardship.” In order to establish undue hardship, the debtor must be able to establish the following:
Very few debtors are able to meet the undue hardship test, but it is worth discussing your situation with an attorney to determine whether bankruptcy may be an option.
Bankruptcy can help eliminate other debts
Even if your student loan debts are nondischargeable, you still may be able to benefit from bankruptcy. Other debts may be dischargeable, potentially freeing up additional income in order to be able to consistently pay on your student loans. Some of the kinds of debts that can be eliminated in bankruptcy include:
Contact a Long Island bankruptcy lawyer today to schedule a free consultation
New York lawyer Ronald D. Weiss has been helping people obtain financial relief through bankruptcy for over 20 years. Call The Law Office of Ronald D. Weiss, P.C. today at (631) 271-3737 to schedule a free consultation.