STUDENT LOAN DISCHARGE
DISCHARGING STUDENT LOANS IN BANKRUPTCY
It's no secret that student loan debt is a huge problem in the United States. Millions of Americans are struggling to pay back their loans, and the situation seems to be getting worse instead of better. If you're one of those people who are struggling to pay back your student loans, you may be wondering if there's any way out. The good news is that you can discharge your student loans in bankruptcy. Here's what you need to know about this process and how it can help you get rid of your debt once and for all.
OVERVIEW OF STUDENT LOAN DEBT IN THE US
Before we dive into how you can discharge your student loans in bankruptcy, it's helpful to understand the scope of the issue. Student loan debt in the US is currently over $1.6 trillion and continues to rise each year. This makes it the second-largest source of consumer debt in the US. It's also the only type of consumer debt that can't be discharged through bankruptcy, with a few very rare exceptions.
WHAT IS BANKRUPTCY AND HOW CAN IT HELP WITH STUDENT LOANS?
Bankruptcy is a legal process that allows you to get rid of your debt and start over with a clean financial slate. It can be a difficult process, but it can also be an incredibly helpful one. In most cases, bankruptcy can help you get rid of your student loans, although it's not a guarantee.
THE PROCESS OD DISCHARGING STUDENT LOANS IN BANRUPTCY
The process of discharging student loans in bankruptcy is complicated and requires an experienced lawyer to guide you through the process. First, you must prove that repaying your loans would cause undue financial hardship. This means you have to show that you can't afford to repay the loans and that it would cause significant hardship (such as not being able to pay for your basic needs). Next, you must file a petition with the court and provide evidence of your financial hardship. Finally, the court will decide whether or not to discharge the loans.
RECENT CHANGES IN THE LAW FACILITATING STUDENT LOAN DISCHARGE THROUGH BANKRUPTCY
In November 2022 the US Department of Education made it easier to discharge student loans in bankruptcy by allowing borrowers to submit a "hardship discharge application" to the court. This application can make it easier for borrowers to prove undue financial hardship, which can help them get their loans discharged more quickly.
According to new Federal Student Loan Policies, there may be some cases in which the federal government may decide not to oppose a federal student loan bankruptcy discharge, clearing the way for a borrower to eliminate their federal student loan debt without having to complete a full adversary proceeding.
FINAL THOUGHTS ON DEALING WITH YOUR STUDENT LOAN DEBT
Student loan debt can be a huge burden, but it doesn't have to be. By understanding the process of discharging student loans in bankruptcy and taking advantage of recent changes in the law, you can get rid of your debt once and for all. Make sure to consult with a knowledgeable attorney before filing for bankruptcy, as the process can be complicated and it's important to make sure you understand all of your options. With the right help, you can get rid of your student loan debt and start fresh.
If you're struggling with student loan debt and looking for a way out, Almeida & Davila can help. Our experienced attorneys specialize in helping people discharge their student loans in bankruptcy and can help you every step of the way. Contact us today for a free consultation and find out how we can help you get rid of your debt.
We understand that dealing with debt can be a stressful and difficult process. That's why we are committed to providing the best possible service and to helping you every step of the way. Contact us today for a free consultation and let us help you get rid of your student loan debt once and for all.