Many people are under the impression that
bankruptcy will not eliminate or discharge student loan debt. While this is true,
it may not be the case for everyone. In some cases, student loan debt
may be causing the household an undue hardship. This may allow student
debt to be eligible for elimination, but even if you are struggling to
make payments on non-student debt such as credit card bills, medical bills,
mortgage and vehicle loans, you may be eligible to have such debts reorganized
or discharged to make student loan payments easier for you.
When student loan debt can be discharged it is when the court see's
the loan as being an undue hardship. This means there is sufficient evidence
that the loan is or will cause yourself and your dependents significant
difficulty in getting the loan repaid. It is possible to experience an
undue hardship while making payments or the debt itself may cause additional hardship.
Some struggling to pay their debt may have multiple obligations making
it difficult to pay them all each month or leaving them unable to pay
certain bills. If you do not qualify to have student loan debt discharged,
you may be able to have other debts eliminated or restructured.
Chapter 7 bankruptcy allows you to eliminate qualifying unsecured debt such as
medical bills, personal loans, and credit card debt.
Chapter 13 bankruptcy reorganizes debt obligations into an affordable repayment schedule. This
option may also help reduce what you owe on certain accounts.