Can I Discharge My Student Loans?

Recently the news ran a story on the dollar amount of student loans guaranteed by the government exceeded $1 trillion. They went on to say that there was a student loan bubble being created by these programs. Many young adults are exiting school and starting their lives in debt because of school and personal loans to get through school. The sad thing is there are just no jobs out there for these young graduates leaving them in a quandary and no money to pay off these debts. The average young adult leaving college starts their life off being $30,000 in debt. This might not seem like a lot of money, but when there are no jobs out there $1000 is a lot of money.

Because of this dilemma, one question that is asked of a bankruptcy attorney regularly is, “Can I discharge my student loans?” As a general rule, the bankruptcy attorney will have to say a straight up no. Although there are extenuating circumstances, when filing bankruptcy, student’s loans are not dischargeable. If a person believes that they have a reason that their loans should be discharged in their bankruptcy filing they will need to have their bankruptcy attorney filed a motion with the court for a hearing before the judge and explain why the individual will not be able to pay these loans back and need them included in their bankruptcy discharge. In most cases, the request for the motion when filing bankruptcy will be denied unless there is a circumstance like a medical reason that a judge would see it fit to include them in their bankruptcy discharge. What a judge looks at is the ability for the individual to be able to pay those loans back in their lifetime. A circumstance that might allow them to be discharged when filing bankruptcy is the individual had an accident that caused a disability that would make them not have the ability to pay back the loans due to this disability. Another factor that might come into play is age. If an elderly person is filing for personal bankruptcy and is receiving Social Security and on a fixed income, the judge might see this as a factor that this individual should be allowed to include these as debts and discharge them in their bankruptcy filing.

All circumstances vary and should be discussed with a bankruptcy attorney because this is a complicated and gray area of the bankruptcy code. It’s not that it can’t be done, it’s just unlikely that the bankruptcy judge will allow it when an individual is filing personal bankruptcy.

Getting answers to those tough bankruptcy questions needs to be thought of before you make a decision when it comes to your financial problems. Finding the answers to help you understand your situation more clearly can help you make an informed decision about filing bankruptcy. Take a minute to call or fill out the form to have a FREE NO OBLIGATION CONSULTATION with a bankruptcy attorney in your area.