Filing bankruptcy erases a lot of debt; student loan debt isn’t one of them. Because we hear and read this it is assumed that student loan debt is not qualified for discharge. Many don’t bother adding it because it’s impossible. Many people wonder if student loan debt could be erased yet don’t ask for help. There are even attorneys out there who don’t want to go through the process because the chances of discharging student debt is slim. Is the impossible possible?
The simple answer is yes. All you need to do is contact us.
The long answer is yes, but there are some guidelines to follow.
- You must be in dire financial hardship to the point where you can’t afford to pay student debt off. This is called an “undue hardship,” and it’s hard to prove in court due to aggressive lawyers representing the creditors. There’s a procedure called “adversary proceeding”; it’s an additional step that must be completed prior to discharge. It’s amazing how many people discharged their debt after this process.
- Permanently disabled people have a chance to get their debt erased, and so does people with low income and people who received loans from a private for profit trade school.
Each court follows a test to determine whether debts are discharged. The common tests are Brunner and Circumstances; we go by the Brunner Test. The court will determine poverty level, persistence and good faith. You must show the court that you can’t pay the loan and maintain the minimum standard of living, that the current situation will continue for a certain amount of time, and you promise to repay loans despite all this.
The type of student loans you have does matter in how you get discharged. Federal loans, or government loans, are handled differently from private loans. The catch-22 is that you need money to get the chance to be free of debt, but having too much money makes you disqualified for debt discharge. So how can I win this without spending too much money? Your lawyer can assist with that answer.
Don’t believe press releases, broadcast media and other news outlets that say student loan debt discharge is impossible. It is possible. A Dayton, Ohio Bankruptcy Attorney can assist you with possible ideas for student loan discharge. We will do everything in our power to see if your debt can be erased. The chances are slim, but you won’t know if you’re one of the lucky ones until you try. The other option is to file for chapter 13 and go through a repayment plan. You’ll be discharged after 20-25 years of continued payment regardless of the remaining balance. It’s going to take some fight in you to be successful.