While many forms of debt can be easily discharged in bankruptcy proceedings, student loans are some of the most difficult. Student loan bankruptcy laws are notoriously difficult to bypass, which is one of the primary reasons why they are readily available from so many different providers. Whether talking about federally funded or private loans, there are some specific, difficult conditions that one must meet if they are going to discharge their student loans during a bankruptcy proceeding. Though the student loan bankruptcy laws differ according to jurisdiction, the general language remains the same.
The reason why student loan bankruptcy laws are so tough on borrowers is that three separate conditions must be met for qualification. Additionally, fighting these loans often means fighting the federal government in court. Suing the government has never been an easy task for any reason, and it usually requires high powered legal help to even get started. For this reason, many student loan borrowers find that their debts are effectively non-dischargeable, no matter how difficult the situation happens to be.
So what are the three conditions that one must meet if they are filing suit to discharge student loans? The first is relatively easy, and it is generally met by the typical student loan taker. Student loan bankruptcy laws require debtors to show that a minimum standard of living would be impossible given current debt amounts and current income. This also includes family considerations, so those people who have to feed and clothe families will generally qualify under this federal test. The problems arise when debtors have to meet some of the other conditions necessary for student loan bankruptcy.
The second condition generally required by the court requires debtors to prove that their situation is unlikely to change over the course of the loan repayment term. That means that one must prove beyond a reasonable doubt that there is no chance of financial success coming for the next 20 to 25 years. As you might imagine, this is a difficult idea to prove in court, and it requires a special set of conditions. For those who are both healthy enough to work and educated enough to land opportunities, it is almost impossible to satisfy this condition. Even with some sort of physical handicap, this can be a difficult case to win.
The last condition of student loan bankruptcy laws that must be met involves a thorough attempt to pay back the loans. This means that not only do debtors have to make some payments, but they will have had to consider loan consolidation and settlement programs, as well as other forms of income. The law is worded in a way that the lenders have a clear advantage, so winning these cases requires incredible work by a skilled legal team. Though it is not impossible to come up with a victory, student loan bankruptcy laws require extenuating circumstances and a thorough legal approach.
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If you live in Alabama, Florida, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.