Many people encumber themselves far more than they realize by taking out student loans. Once the loans are due, they may not have the job or income anticipated, and quickly, they fall behind in the prime of their lives with burdensome student loan obligations. Upon investigation, they find that, generally, bankruptcy will not relieve them of the student loan, unless hardship can be proved. Providing that proof in bankruptcy court can be difficult. It requires a contested proceeding, proof of previous good faith loan payments, and disability severe enough to prevent repayment.
While student loan debt is rarely discharged in bankruptcy, some other options may be available to you. For example, if you file a Chapter 7 bankruptcy and the loans are relatively small, while other debts are relatively large, by being relieved of your other unsecured or even secured debt, you may free up money to handle the student loans. A Chapter 13 may allow you to schedule student loan payments over a period. Also, there are many non-bankruptcy options available, such as applying for forbearance, sometimes requesting debt forgiveness, combining student loans, and pegging loan payments to income levels.
Since the pandemic revisions and forbearances have been implemented, and the criteria is changing. You can consult with us for the updated information regarding student loans. You can also refer to the "Current Events" section to view new opportunities, some only temporary, which may be helpful. A consultation will be valuable to determine if any of the recent program changes may be applicable to you, as well as the standard benefits that have been available for quite some time.