Many believe that it is not possible to discharge student loan debt. However, this is not entirely true. Student loan debt discharging is not automatic, but you can have your student loan debt discharged if it causes undue hardship. You will need to file an advisory proceeding to seek a discharge. Then, whether or not you have a full, or partial discharge is based on the court's decision based on your level of hardship.
Determining Whether You Are Suffering From Hardship
The courts will look at whether you will be able to maintain a minimum standard of living if you repay your loans. If you cannot, the courts may see that you will be able to maintain your minimum standard of living with a portion of your debt discharged or they may choose to discharge all of it. The situation you are under must be likely to continue throughout the course of the loan. There will also need to be evidence that you have tried to pay back your loans in good faith.
You might have had an occupation that would have allowed you to pay your student loans, but you lost your position. Or, you may have suffered a medical emergency that has caused you to lose your assets and your ability to earn a living, resulting in you being unable to pay your student loans.
Chapter 7 Vs. Chapter 13
You can only discharge your student loan debt through Chapter 7. If you file for Chapter 13, you may be able to have your minimum monthly payments reduced, which may help if you are still earning a wage. Your best option is to contact a bankruptcy attorney who can go over your options with you and help you understand which option will help you escape your debts.
Fighting Your Lenders
A bankruptcy attorney is essential because the creditors are likely to fight your attempts to discharge your debt. Therefore, before you attempt to discharge your debt, you should explore other options. There are income-based repayment plans available. Also, if there is a reason to believe that your situation will improve, you might want to apply for a forbearance. Then, you can stop or reduce your monthly payments for up to a month. Interest will still accrue on your loan. Also, whether you are granted this option is based on your lender. However, they are more likely to grant this if you are considering filing for bankruptcy.
