Student Loans Non-dischargeable by Bankruptcy
One thing that most students are familiar with is debt. There are very few people that can get through years of higher education without compiling some kind of debt. Schooling is expensive and since it can be difficult to pay for living expenses, tuition, books, and recreation, students may be forced to take out student loans to pay for their education. One of the problems with student loan debt is that there is nothing to back it up in case of non payment.
This is different than a mortgage or a car loan because in the case of both of those types of loan, the lender has something that they can physically take if the borrower is unable to pay the loan back in a timely manner. When students continue to borrow money for school, not realizing how difficult it may be to pay the debt back, they can quickly find themselves with more debt than they can handle even after they have a fairly high paying job after graduation. One option that some people may need to consider is bankruptcy, although it may not be very viable for student loans. Students with student loan debt may find it difficult to rid themselves of the school debt as it is much more difficult to discharge student debt by bankruptcy.
One of the main reasons that bankruptcy is not an option for student loans is the fact that federal loans for students are not dischargeable through bankruptcy. Any loan that you take out for schooling, if given by the federal government through programs like the free application for federal student aid, cannot be discharged when you file for bankruptcy and will still have to be paid back in full. In October 1994 the government changed the federal laws about a former student having to prove "undue hardship" on themselves and his or her dependants in order to discharge a loan and made it basically impossible to satisfy all of the requirements for discharge.
There are alternatives to filing bankruptcy because of student loans so you should be willing to speak with a lawyer about your options.
There are some exceptions that would allow a student to get their student loan deferred including the school closing while the person was enrolled, the student being on an approved leave of absence when the school closed, disability, and the school closing within 90 days of withdrawal from the school. One other situation where the loan would be completely discharged would be if the borrower died.
These regulations can be difficult to understand and even harder to meet, so it is important for you to get some help on the alternatives to bankruptcy. One place that you can turn for this help is a San Antonio bankruptcy lawyer. A bankruptcy lawyer will be able to help you through the process of bankruptcy and answer any question that you have about eligibility and discharging different types of loans through bankruptcy. Do your research and find a bankruptcy lawyer that has the experience necessary to help you in understanding the laws and meeting the requirements of your debt repayment plan.
Questions and Answers
Some of the biggest sources of debt that people have are credit cards that they use for daily purchases, home mortgages, automobile loans, and student loans. Paying on credit is easy at first, but when you get the bill, it can be overwhelming to see what you owe.
The inability to pay the bills and keep up with what you owe may force you into bankruptcy in some situations. Some debts cannot be discharged including child support.
The decision to file bankruptcy is a serious decision but it is a decision that can give you a fresh start if there is no other way out. Bankruptcy is a legal way to discharge unsecured debt that can provide an overwhelmed debtor with a new beginning. It may be possible to keep your present home and your car after filing bankruptcy. A law firm such as the Malaise Law Firm, with attorneys skilled in San Antonio bankruptcy law can help you.
More debtors are turning to debt consolidation services, which promise on those daytime and late-night television ads to lower your monthly payments into one manageable fee. However, what if your situation is so desperate that these options will not be enough to ease your burden? As Texan debtors and others throughout the United States are deciding, filing for bankruptcy protection may be the best option in these troubling economic times.
Students from both private and public universities all over the country may also provide low cost or free advice. The sessions will only achieve directing clients to the right legal path in filing the right papers. Note that with the new bankruptcy laws taking into effect making the bankruptcy filing process more difficult than usual, an experienced bankruptcy attorney will be worth your money.
Many people who enter the bankruptcy process worry about the fate of their credit. This is actually unnecessary as the bulk of credit damage happens before the bankruptcy process is even initiated. While no one wants the added hassle of rebuilding their credit after resolving debt troubles, doing so can put you leaps ahead of others in the credit game.
Americans are now filing Chapter 7 or 13 Bankruptcy to get their debts under control. Bankruptcy in itself is designed for debt elimination. Chapter 7 bankruptcy functions to cancel out unsecured debt such as utility or medical bills, credit card, etc. Chapter 13 Bankruptcy on the other hand is designed to give individuals more time in repaying all their debts.
Filing for bankruptcy is good news whenever you are struggling with your credit card debt, mortgage or medical bills. Bankruptcy laws help families and individuals in their debt struggles. You have two options on how to deal with your debt problems, Chapter 7 (debt elimination) and Chapter 13 (reorganization). Always remember that you can regain credit again after successfully filing your bankruptcy.
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