There are many advantages of pursuing a college degree. The job opportunities a college education can provide are limitless. Still, with the cost of attending college continually on the rise, you may be forced to take out large loans in order to pay the tuition. What you may not know is that these loans carry high interest rates and may take years to pay off. The burden of student loan debt has become a serious problem, and you may be searching for a way out. Up until recently, bankruptcy was not seen as a viable path toward getting relief on student loan debt. However, over the last few years, bankruptcy courts have begun to look at student loan debt in a different light, even allowing for discharge in some instances. Here’s more on how bankruptcy affects student loans and what you can do if you are facing crippling debt.
The Student Loan Debt Crisis
Recent polls estimate that the average amount of college debt among student loan borrowers is over $30,000. This number has been on the rise for the last ten years with no signs of slowing down. While wages remain at a standstill, it has become even more difficult for recent college graduates to pay off their loans and still have enough money left over to support themselves. What this means is that there is a growing number of Americans that are simply unable to pay back their student loans. If you find yourself in the unfortunate position of being unable to pay your student loans, then you may face severe consequences. The garnishment of wages, late fees, and significant damage to your credit rating are just a few of the possible repercussions of not paying your loans.
Up until recently, the courts have been reluctant to allow these debts to be eliminated by filing for bankruptcy. However, bankruptcy court judges have begun to take notice of the dire situation many Americans are experiencing due to crippling student loan debt. In fact, some federal bankruptcy court judges have openly expressed their willingness to consider discharging (eliminating) student loan debt through bankruptcy. While there has not been a change in bankruptcy law, some bankruptcy courts have developed a test to determine whether student loan debt should be discharged though bankruptcy. This test (also known as the undue hardship test) will look at several factors to determine if forcing you to repay your student loan will create an undue hardship. What this means is that if paying the loan will not allow you to maintain a minimal standard of living, and you have made a good faith effort in repaying the loan, then you may qualify to have your student loan discharged.
Whether you can successfully get your student loan debt discharged through bankruptcy will largely depend on the judge that is handling your bankruptcy case. Additionally, your chances of getting rid of your student loans will likely increase if you hire a skilled bankruptcy lawyer to handle your case. Your lawyer will have the expertise to make the best argument for discharge based on your specific financial situation.
Colorado Bankruptcy Lawyers Are Here For You
Consumer Law Pro is focused on helping people work through their financial issues by pursuing debt relief solutions including bankruptcy. Our skilled lawyers will take the time to fully understand your situation, and can help you pursue the solution that most closely fits your financial needs. To consult with Consumer Law Pro, contact us online or call (303) 297-7729.