In 2012 I wrote a blog article about how difficult college graduates are finding it to pay their student loans. Paying student loans is still one of the biggest problem facing today’s millennials – people in their 20’s and 30’s–right now, is student loans. As of now, the Bankruptcy Law allows student loan debtors to discharge student loans only if repaying the loans would impose an “undue hardship” on the debtor. There is a long history behind this, and there have been efforts to lobby congress to make it easier, but this is where we are at.
Courts have interpreted this rule very strictly, and it has been next to impossible to prove that “undue hardship” standard. However, recently, some courts around the country have been discharging student loans, under very limited circumstances.
But, there are also ways that we can help you attack the student loan debt. One way is in Chapter 13 Bankruptcy, which stops collections, lawsuits and other harassment, and allows you to make payments that you can afford. Interest is added during the case, but this can give you breathing room for up to 5 years, and give you a chance to pay it down, at least partly.
Take a long look at your student debt—is some of it direct tuition debt owed to the school? That debt may be eliminated. It does depend on all of the facts, but in many cases, students can discharge school tuition in Bankruptcy.
Are there third-party collectors involved? They have to follow the rules of collection, under the Fair Debt Collection Practice Act. If they don’t, you can sue them!
Bottom line: Call us, we can help you sort through your student debt, make sense of it, and give you a plan of attack. We can help you get “Peace of Mind”, while you start on your career path.
Daniel J. Winter
BankruptcyLawChicago.com
312-789-9999
Offices in Chicago, Gurnee, Oak Lawn, and Skokie, Illinois
