Over 40 million Americans currently have student loan debt, which totals to over one trillion dollars. This creates a huge burden for young adults as they graduate from college and begin their careers that could stay with them for years as they try to pay it off. With so many people struggling due to student loan debt, many wonder if it can be discharged through bankruptcy. While bankruptcy may help you pay off many of the debts you owe, it doesn’t help with student loan debt.
There are a few types of debt that bankruptcy won’t discharge, and student loan debt is one of them. If you’re wondering, “why can’t you file bankruptcy on student loan debt?” read on to find out more.
Why Aren’t Student Loans Dischargeable?
Although student loans are unsecured debts, like many loans that are dischargeable through bankruptcy, these are slightly different and can’t be discharged. A person may have student loans through the government, a private lender, or both, but regardless of the lender, bankruptcy won’t be able to discharge them. Student loans are a type of nondischargeable debt, similar to child support payments and alimony. Despite not being dischargeable, some who are filing for Chapter 13 bankruptcy may have an easier time paying back their student loan debt by rearranging it into a repayment plan.
Are There Any Exceptions?
While it’s not common, there are some cases where people can get their student loans discharged. Depending on the circumstances a person faces, they may be able to show that paying back their student loans would cause them undue hardship. However, proving that a person will face undue hardship from their student loan debt can be extremely difficult, so few people can do this.
There are a few things a person will need to prove to have their student loans discharged. First, it will depend on an individual’s income. In cases like this, a person wouldn’t be able to afford a basic standard of living while paying back their student loans. If this is true, these financial difficulties also need to be likely to continue into the future with no chance of improving anytime soon. In addition to these two factors, the individual also needs to have been attempting to pay off their student loans in the past. This individual has done all they can to pay back the loans so far, but continuing is too much of a financial strain. While this may seem like the case for many with student loans, getting them discharged due to hardship is extremely difficult.
See How a Bankruptcy Can Help You
Although most people won’t get any relief from their student loan debt by filing for bankruptcy, it may still help your financial situation. If you have student loan debt or any other type of debt you’re struggling to pay off, you likely have a lot of questions about how filing for bankruptcy can help your situation. Bankruptcy can be difficult, but working with experienced bankruptcy lawyers in PA can help. At JPP Law, Attorney Jason P. Provinzano can help you through this process so that you can start recovering from debt.
Contact JPPLaw today for a free consultation with a highly rated bankruptcy lawyer.