Bankruptcy and Student Loans

Many students rely on student loans to complete their college degree. They depend upon their job and salary to pay enough for them to repay the debt. At the end of your college career, you easily could have more than $20,000 of debt to pay off. But what do you do if you are not making enough money to cover the debt and your other living expenses?

Bankruptcy Attorney in Tampa, Florida – Peter Zooberg – (813) 990-7944.

Bankruptcy Only In Some Situations

Many people think they can file for bankruptcy to avoid paying their college loans. But this is often not the case. Federal law states that student loans may not be discharged in bankruptcy.

Bankruptcy only will help you directly with your student loan debt if you can show that you are experiencing ‘undue hardship’ due to your debt obligations.

That determination must be made through a court action. This is difficult to obtain. It is up to the court entirely whether the standard has been met. Unfortunately, the US bankruptcy code does not provide a strict definition of undue hardship. So it is up entirely to the judge’s discretion.

To attempt to have your student loan discharged based upon hardship, you will need to file a petition or adversary proceeding to arrive at a determination.

The Brunner Test and Undue Hardship

Judges typically use what is called the Brunner test to determine if you are under undue hardship. The Brunner test requires a determination that:

  • The debtor cannot maintain a minimal standard of living for himself and his dependents if he must pay the student loans
  • Other mitigating circumstances exist that this situation will persist for much of the repayment period of the student loans
  • The debtor has made substantial good faith efforts to pay the loans

If you are able to prove undue hardship, your student loans may be canceled. This usually requires the services of an excellent attorney.

The good news is that even if bankruptcy will not cancel your student loans, there still may be other options.

Contact An Attorney Today

Are you considering bankruptcy in Florida? Do you have student loans? This could be a stressful and confusing time for you, and we are ready to help you to decide what to do. Call our office at (813) 990-7944 to speak to a bankruptcy lawyer in Tampa.

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