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Can people discharge student loans in bankruptcy?

On Behalf of | Mar 29, 2023 | Bankruptcy

Some people file for bankruptcy because they face very aggressive collection activity, but other people simply need to discharge their debts to make their family budget a sustainable reality. For many professionals, student loan debt is often the most significant drain affecting their family’s budget.

They may have tens of thousands of dollars in debt, possibly more if they attended graduate school. Their payments could consume so much of their income that they may struggle to qualify for a mortgage. There is a lot of bad information online about the rights of student loan borrowers during bankruptcy proceedings. Therefore, it is worth asking, “Is it possible to discharge student loans?”.

In specific, rare cases, people can discharge student debt

One of the times that a student borrower would be eligible for a discharge of their student loans would involve fraud committed by an accredited educational institution. In circumstances where people go into debt pursuing an education that offers few benefits, the status of the school they attended could influence whether or not they can discharge their student loan debt.

For the average student who attended an accredited and respected college or university, a discharge based on technicalities will be unlikely. Instead, they will have to look into whether they qualify for a discharge based on hardship. Such claims often require some kind of disabling medical condition or other situation that makes it impossible for someone to work and make use of their education.

When a student borrower can show that they have inadequate income to repay their loans and that continuing to attempt to do so would pose an undue hardship, they could potentially qualify for the discharge of their student loans.

Complicated cases require professional assistance

Some people will try to navigate bankruptcy proceedings without professional support, but the more complicated the case is, the less likely they are to achieve success. Those hoping to eliminate at least some of their student loans in a personal bankruptcy filing may have to request special hearings and fill out unusual paperwork as part of that process.

A layperson could very easily make mistakes that would prevent them from discharging their student loan debt when they may actually be eligible to do so. The more complicated someone’s financial circumstances and debts are, the more important it usually becomes for them to learn more about the law and connect with professional support throughout the bankruptcy process. For these reasons, understanding the rules that apply to the discharge of different debts can benefit those who are struggling to balance their budgets.


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