If you have debt, student loans may make up a large portion of what you owe. Generally, it is harder to get student loans discharged during the bankruptcy process, but it is possible.
According to Federal Student Aid, you must file for an adversary proceeding if you want to get your student loans discharged as part of the bankruptcy process. When you do this, you must prove that repaying your student loans would result in “undue hardship” for you and any dependents you have.
Determining undue hardship
The court will use several factors to determine whether repaying your student loans will create undue hardship. For example, if paying off your student loan will make it impossible for you to keep up with a minimal living standard, the court may decide that undue hardship is present. The court will also consider whether you have attempted to repay your loans before moving forward with bankruptcy and if the hardship will last while you repay your loan.
What can happen next
Depending on what the court decides during your adversary proceeding, your loan may be eligible for partial or full discharge. Or the court may decide you must pay off your loan with terms that are different from the original.
It can be difficult to determine if you should move forward with bankruptcy to have student loan debts discharged. If you have a concern about your student loan debt and want to know how to proceed, contact the Law Offices of Brian A. Barboza.