For many people today, student loans are a huge financial hurdle that seems impossible to overcome. With seven in 10 students graduating with student loans and the average student debt nearing $30,000, student debt is becoming a major economic issue within the United States. Proposals have been made to relieve some of the burden on students, but it is unclear if any of the proposals will take hold and until they do, individuals continue to suffer severe financial burdens.
Unfortunately, individuals who are struggling with student loan debt have limited options in large part because bankruptcy does not generally discharge student loans. It is important to understand whether bankruptcy will help your financial situation when you are dealing with a large debt burden. Ronald D. Weiss, PC can provide you with guidance on the impact of bankruptcy as well as representation throughout the entire process of a consumer bankruptcy filing in Nassau.
Most unsecured debts, like personal loans and credit cards, can be discharged as a part of a bankruptcy filing. Student loans, however, have been given unprecedented protection by lawmakers. Not only can collectors do things like take your tax return if you don’t pay, but they are also protected from discharge of student loans in bankruptcy.
Under the law, a debtor cannot discharge or eliminate student loan debts under any chapter of bankruptcy, including the two most common for consumers: chapter 7 and chapter 13. This means that you have to pay no matter what, regardless of whether you actually can pay, whether you can find a job in your field or even whether you got your degree.
There is a very limited exception in which student loan dischargeability in Nassau may be possible. If repayment would be a serious undue hardship, then you may have some or all of your debts forgiven. Unfortunately, the definition of a hardship that causes an undue burden is very narrow. For the most part, only someone with a drastic change in life circumstances such as a complete disability would be able to qualify for student loan dischargeability.
While you may not be able to eliminate your student debt, bankruptcy can still help you to reduce or get rid of other bills and debts owed to creditors. If you are able to get rid of some of your other financial obligations, hopefully student loan debt will become less of an onerous burden and you will be able to afford your payments.
Ronald D. Weiss, PC has extensive experience with student loan bankruptcy cases and other types of bankruptcy claims. Call today to speak with a member of our legal team and learn more.