When you file for bankruptcy protection in Suffolk County, eligible debts may be discharged by the bankruptcy court. Discharge means that the debts are forgiven and you are no longer legally obligated to pay them. Lenders cannot try to collect on the discharged debts after a bankruptcy filing.
Unfortunately, not every type of debt is eligible for bankruptcy protection. In most cases, student loans are afforded special legal protections and thus cannot be discharged in bankruptcy in Suffolk. If you are concerned about student debt or about whether you can find debt relief, contact an experienced Suffolk bankruptcy attorney at the Law Office of Ronald D. Weiss, P.C. for more information.
Student Loans and Bankruptcy
Government-funded student loans have generally not been dischargeable in bankruptcy since 1976 and private student loans have not been dischargeable in most bankruptcies since 2005. Federal lawmakers have made various efforts in recent years to try to change this rule and provide at least some debt relief for struggling students, however these efforts have not been successful.
Unless or until the law changes, student loans will not be eliminated in bankruptcy except in very rare cases where it would be an undue burden and create an extreme hardship to repay the debt. Usually, a judge will allow for student loans to be forgiven as an undue burden only in a very limited number of situations such as when the borrower has become permanently disabled and is completely unable to work to repay loans.
Simply not being able to find a job is not going to make student loan discharge possible, nor is not getting a degree. Student lenders have some of the best protections available under the law of any type of lender, which unfortunately leaves people drowning in thousands of dollars in debt just because they wanted to get a good education.
The inability to discharge student loans in bankruptcy does not mean you will get no relief from the money you owe. If you have other types of debts such as credit card debt or personal loan debt, bankruptcy may absolve you of the responsibility to pay back this borrowing. Eliminating other debt payments may help you to find the wiggle room in your budget that you need to repay your student loans.
You can also put student loans into deferment under certain circumstances, or opt for income-contignent repayment solutions that lower your monthly payment to a reasonable level.
An experienced Suffolk bankruptcy and debt relief lawyer at the Law Office of Ronald D. Weiss, PC can help you to understand your options for bankruptcy as a debt relief solution and can assist you in finding the right ways to deal with your debt issues. Call today to learn more.