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What You May Not Know About Student Loan Debt & Bankruptcy

Posted By Allmand Law Firm, PLLC || 16-Jan-2014

Debtors may be under the impression they are unable to get student loan debt discharged. While this may be the case for some, others may qualify to have this debt eliminated but don't bother asking their attorney about it. When you file you are expected to list debt obligations you have outstanding, including those that are non-dischargeable. Yet, there are those who wait until after their bankruptcy case is completed before reviewing whether their student loan debt can be eliminated.

Even if you don't plan to file bankruptcy in the immediate future you can review concerns surrounding student loan debt with a qualified bankruptcy attorney. While there are qualifications you need to meet to get the loan eliminated, the type of loan you have can also make a difference in how it is approached in bankruptcy. In some cases you may be able to get your loan fully or partially discharged.

A few factors that are considered in bankruptcy when it comes to potential student loan discharge includes income reduction, medical illness, or anything in the debtor's situation that would give clear evidence the debt will cause further hardship. For others there may be evidence of household income not likely to increase; making it more difficult to even make small payments toward the balance.

Some student loan debts included in a completed bankruptcy case may be eligible for elimination. In such situations an adversary proceeding can help you pursue the claim if you feel you are entitled to the discharge. Discuss student loan elimination concerns with your attorney.

Categories: Student Loans
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