Bankruptcy Filing with Student Loans
October 4, 2021
If you are struggling to make ends meet while dealing with student loans, it is important to understand the repayment options available to you. You can file for bankruptcy, but it can have long-term consequences with obtaining credit for future transactions. Before you file, it can be helpful to know what to expect. Here is everything you need to know on how to file bankruptcy with student loans.
Before Bankruptcy Filing with Student Loans
Individuals who are unable to afford their monthly student loan payments may want to contact the loan servicer about repayment plans and other options. With private student loans, repayment terms can vary. You may be eligible for deferment if you are experiencing financial difficulties. Loan consolidation or rehabilitation can be an option for student loans in default. If these options are not effective, you may want to consult with a bankruptcy attorney.
Discharge for Student Loans in Bankruptcy
Student loans may be discharged in bankruptcy if you can prove repayment would cause an undue hardship. Since there is no standard definition for undue hardship, financial situations are left to the discretion of each bankruptcy court. You may be eligible if you can prove you have made good faith efforts to repay your loan, but continuing would not allow you to meet a basic standard of living.
Bankruptcy Filing Options with Student Loans
There are two common options to consider if you choose to move forward with filing for bankruptcy with student loans. A Chapter 7 bankruptcy requires you liquidate your assets in order to satisfy part of your debt. These assets can include your property, car or retirement fund. Since this type stays on your credit report for ten years, you may struggle to access credit into the future. A Chapter 13 bankruptcy stays in your credit report and requires a court-structured payment plan.
Expert Bankruptcy Legal Advice for Student Loans
Filing for bankruptcy can have serious financial repercussions, so consulting an experienced attorney is a wise decision. George R. Belche, Attorney at Law can help you discover your options to assist with your student loan debt. Call today for a consultation to discuss your case.
George R. Belche, Attorney at Law
189 West Pike Street, Suite 103
Lawrenceville, GA 30046