Among the financial issues you may be struggling with are overwhelming student loan debts.
A recent article from USA Today names student debt as one of the biggest threats to the state of the economy:
According to TransUnion, in 2005 student loans accounted for less than 13% of the total debt load for adults age 20-29. Today, student loans account for nearly 37% of that group’s outstanding debt.
Soaring tuition prices means that students are relying more on loans and are getting hit with various fees and penalties on top of the money they need to pay back with interest. The terms of their loans may be unfavorable, especially those taken from private lenders; but even a loan borrowed from the federal government may have interest rates that are difficult to cope with.
If your total debt has reached a point where you’re considering bankruptcy as a solution for your financial problems, one concern you may have is that student loans can’t be discharged. However, is this always the case?
You have an opportunity to try to get your student debts discharged in whole or part. You would have to make a special filing in bankruptcy court proving that paying back your student debts would be an “undue hardship.”
What does an undue hardship mean? If you’re struggling with a medical condition, or are unemployed or have a very low income, you may qualify for an undue hardship. You can further strengthen your case by showing that you’ve made sincere efforts to pay back your loans in the past.
Does filing for undue hardship work? This depends on the strength of your case and also the bankruptcy court you’re working with. Sometimes, you’ll receive a full discharge of your student loans, while other times you may receive a partial discharge; however there’s always the possibility that your claims will be rejected.
If you live in Ohio, don’t hesitate to contact a Dayton, Ohio bankruptcy attorney for assistance. Your attorney will carefully go over all your options with you and help you present the strongest case in court.