Can I File Bankruptcy on my Student Loans?
- grennierlaw
- Oct 16, 2015
- 2 min read
Student loans have become an increasing problem in the United States in recent years. In fact, student loan debt has now surpassed credit card and auto loan debts, second only to mortgages! Many students wonder, "Can I File Bankruptcy on my Student Loans?" Unfortunately, whether or not you took out a public or a private student loan, it is incredibly difficult to get this type of debt wiped clean through bankruptcy.
In most cases, student loans cannot be included in bankruptcy filing. The small percentages of cases that do allow for it involve the person filing to qualify as a “hardship” case. In order to qualify, you must prove that the loan causes you to be unable to sustain a minimum standard of living. Also, you must show that this situation is unlikely to change in the future. Finally, you must have made a good-faith effort to pay the loans in the past. Not many situations can pass these criteria in a bankruptcy court, but an example could include permanent disability or illness. If you believe you do qualify, you should consult a lawyer to make sure the case runs as smoothly as possible in your favor.
For the majority of cases where bankruptcy will not erase student loan debt, there is at least some relief to the borrower. Under Chapter 7 bankruptcy, student loan collections will temporarily stop through the course of the proceeding. This period usually lasts between 4-6 months. You can also check with the source of the loan to find out if any deferment options are available in your situation to further suspend the payments.
If you have any questions about how your student loans will be affected by the bankruptcy process, contact the lawyers at Grennier Law, PC today.
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