Student loans are difficult, but not impossible, to dismiss in bankruptcy. It is a common misconception that you can not apply for a student loan in bankruptcy. It is possible to raise federal and private student loans at the time of cheap bankruptcy lawyer, but this is more difficult than eliminating most other debts. Because of the potential cost and financial impact of bankruptcy, check your debt relief plan before making a decision. Bankruptcy lawyers have stated that you cannot use bankruptcy to protect yourself from student loans. The media and the student loan service providers have been repeating this for so long that everyone thinks this is true. The reality is very different. In fact, bankruptcy can be a useful tool for dealing with student loans. Firing a student loan in bankruptcy is not impossible, but as we have been trained, the conditions for doing so are too demanding and little to try. However, for the right people, lifting student loans in bankruptcy is a powerful tool.
The following is the impact of bankruptcy on student loans and how to determine if it is right for you.
How to submit a student loan bankruptcy application
The issuance of student loans
Occurs at the end of the bankruptcy process. This is the first thing you need to do. Find a cheap bankruptcy lawyer. While lawyers are not absolutely necessary, working with a lawyer who has at least one student loan experience can help you complete complex processes more easily. Bankruptcy filing fees range from a few hundred dollars to several thousand dollars, depending on your location and the complexity of the case. In addition, legal fees are required for the confrontation process required to cancel a student loan. However, if you can afford the lawyer’s fees, you may not be eligible for a student loan bankruptcy.
Apply for bankruptcy
You must file for bankruptcy before the student loan is lifted. Your cheap bankruptcy lawyer can help you determine the type of consumer bankruptcy that suits you best. If you have filed for bankruptcy but have not tried to raise your student loan, you can reconsider the case and argue for its withdrawal.
File a complaint to start a rival trial.
The cancellation of a student loan following a bankruptcy requires another legal action called rival action. To resolve this problem, you or your lawyer is more likely to file a written complaint summarizing your case. From there, the case will be tried until the judge determines the outcome. You may receive a complete discharge, a partial discharge or no discharge.
How to prove the excessive difficulty of student loans
To pay student loans through bankruptcy, you must prove that they are “excessively difficult” in your opponent’s lawsuit.
• The US bankruptcy law does not define excessive hardship, so the bankruptcy court interprets its meaning differently. You must prove that you complete the three steps of the Brunner test in order to pay off your university debt
• Depending on your current income and expenses, paying the student loan amount will prevent you from maintaining the minimum standard of living. To meet this requirement, you generally have to incur additional costs and do everything in your power to increase your income, but this has not been successful.
• You can meet this requirement by repaying certain loans, trying to negotiate a payment plan and working to reduce unnecessary expenses and increase revenue.
• Different jurisdictions and different judges have different interpretations of these standards, so your results will depend on your location and the judges you receive.
Should you apply for a student loan to go bankrupt?
Although student loans may go bankrupt, they deserve to be explored only in the following situations:
• You have used all means of payment. If you have a federal student loan, see if you can afford income-tested repayments or if you qualify for a loan cancellation program. Private student loans have fewer options for troubled borrowers. However, please call your lender or service to see if they can temporarily reduce your payment or interest rate.
• Your student loan has expired. If your payment is up to date, it may be difficult to prove that it caused unnecessary hardship. In the case of a student loan default, bankruptcy makes more sense, especially if you default on a private student loan and your lender sues you for trying to decorate your salary.
• You can not break the contract. Federal student loans may choose not to default, including collection and loan mergers. If you have repeatedly defaulted on your loan, you may have exhausted these options.
• If you decide to apply for bankruptcy of a student loan, please consult a professional first. A student loan lawyer or bankruptcy lawyer with experience in student loans can help you determine if this is your best choice.