Student Loans and Bankruptcy

Bankruptcy Attorney Dayton, Oh

Every year it costs more to get a degree. When grants aren’t enough are not available, student loans are taken out as a way to help pay for education. Jobs available to the graduate often aren’t enough to cover everyday living expenses and the student loan debt.

When seeking help to pay the bills, people often consider bankruptcy. As a general rule, you will not be able to discharge your student debt in bankruptcy. The exception to this rule is if you can prove undue hardship.

Section 523(a)(8) of the United States Bankruptcy Code

(8)unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for—
an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or
an obligation to repay funds received as an educational benefit, scholarship, or stipend; or
any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;

Undue Hardship

Undue hardship tends to be difficult to interpret since it is such a vague term. You will need an experienced bankruptcy attorney to help you determine and argue for you if you qualify for this relief.

Filing Bankruptcy

If you are unable to prove undue hardship and get your student loan wiped away, you can file a Chapter 13 bankruptcy and pay one affordable payment every month that will be distributed to your creditors, including student loans. Since other debts will be discharged, it will make it easier to make the student loan payments.

Contact a Columbus bankruptcy attorney if you have questions about student loans and if your situation could be considered undue hardship if you have to pay the debt.

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