The Allmand Law Firm, PLLC Difference

Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

How to File for Bankruptcy with Student Loans

Posted By Allmand Law Firm, PLLC || 25-Oct-2017

Higher education is a critical investment for the future, and it has become a commodity younger generations, as well as older generations looking to start new careers, are required to have by more and more companies when beginning their careers. Unfortunately, it doesn’t come cheap.

With rising tuition costs at both public and private institutions, in addition to ancillary costs for books, room, and board, many American students have turned to student loans in order to fund their education. While student loans can be a sound and reasonable investment for one’s future, they can also become a cumbersome debt that looms large over many individuals for years to come. This is especially true when students accumulate large student debt loads, and have difficulties finding employment or jobs that pay them enough to pay down their debt.

If you have student loan debt and are considering bankruptcy, you are certainly not alone. Student loan debt now exceeds credit card debt as Americans ‘largest financial obligations, and the problem has become one economists suggest could trigger the next bubble. As such, legislators and advocates are constantly pursuing ways to deal with the crisis, including gaining control of rising tuition and providing better subsidies and scholarship opportunities to students. While many lawmakers are also exploring ways to make student loan debt dischargeable, or to allow for debt relief to those who carry burdensome student debt loads, student loan debt still generally remains a non-dischargeable debt in bankruptcy.

While student loan debt may not be wiped away by bankruptcy, at least for now, it does not mean that bankruptcy is not a viable solution for debt relief and financial improvement. Having working with numerous clients across the Dallas – Fort Worth area who struggled with student loan debt, in addition to other financial concerns, our bankruptcy lawyers at Allmand Law Firm, PLLC know how to help address the unique issues involved and guide clients throughout the bankruptcy process.

If you think you have a shot at discharging your student debts through bankruptcy, here's what you need to know:

  • There may be options – Although student debt loans are typically non-dischargeable in bankruptcy, there has been increasing use of exceptions made by courts. These are generally reserved for situations where borrowers face undue hardships to both themselves and any dependents if they are required to remain on the hook for student loan debt.
  • Proving hardship – In order to prove undue hardship, courts commonly use a Brunner test, which involves showing: 1) a minimal standard of living cannot be maintained when a debtor is forced to repay student loans; 2) there are additional circumstances that complicate their ability to repay student loans, and which will likely persist through the repayment period; and 3) the debtor has made attempts in good faith to repay the student debt.

These are merely general facts about pursuing a discharge of student loan debt, and it must be mentioned that every case is unique. Your particular situation and the financial circumstances involved will always dictate your available options and whether you may be entitled to a discharge of student loan debt.

If you have questions, our legal team at Allmand Law Firm, PLLC is available to discuss your situation, student loan debt, and how we may be able to assist you in pursuing bankruptcy or other debt relief options. Contact us for a FREE financial empowerment session.

Categories: Student Loans
Blog Home