Filing for bankruptcy will not release you from the debt of your student loans. These are non-dischargeable debts. So, if you are suffering from overwhelming student loan debt what relief, if any, can bankruptcy provide?
We still start with the long shot –there are exceptions. Very, very rarely debtors are able to get their student loans discharged. This is done by literally suing your student loan provider and proving that the student loan debt causes you “undue hardship.” What is “undue hardship?” There is really no set definition but it is completely your burden to prove that this incredibly abstract term applies to you and your situation. I’ll tell you right now, a bankruptcy court judge is more than likely going to side with your student loan provider. So, at the end of this lengthy and costly legal battle, you are right smack dab where you started: completely liable for those student loan debts.
But, bankruptcy can provide hope and relief for these payments in other ways (albeit admittedly roundabout ways).
First off, filing a Chapter 13 bankruptcy can help roll all of your creditor debts (including those student loans) into one, affordable monthly payment. This is how your loans are paid through the length of your Chapter 13 plan. Once your plan has ended, your debts, excluding your student loans, are discharged. Your loan payments resume but you are then without the burden of all those other debts!
Similarly, a Chapter 7 filing doesn’t wipe out student loan debt but it does wipe out all of your other debts. This newly freed up cash flow can help you make your monthly student loan payments when before you could not.
Bankruptcy may be able to help you in unexpected ways. Speak with a Kain & Scott attorney today to find out how.
Request your consultation with MN’s HIGHEST Google Reviewed bankruptcy law firm today at www.kainscott.com