How to File for Bankruptcy with Student Loans

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.