Roseville Student Loan Bankruptcy Lawyer
As more and more employers emphasize the importance of having a college degree, many students are thrusting themselves into large amounts of debt to fund undergraduate and graduate degrees. Unfortunately, some students do not get the position they desire upon graduating. This can make it difficult to make a dent in a mountain of student loan debt. If you or a family member are considering filing bankruptcy to deal with student loan debt, you should consult with an experienced Roseville student loan bankruptcy lawyer today.
The skilled lawyers at The Bankruptcy Group possess a wealth of experience handling various types of bankruptcy issues, and we will use this experience to represent you. Managing student loan debt is a stressful process, but we are here to help you explore options that can alleviate the process. To schedule a free legal consultation to discuss filing for bankruptcy, call The Bankruptcy Group at 1-800 921-5351.
Student Loan Debt Statistics
In recent years, there are about 42 million individuals with student loan debt that equals $100,000 or less. Of these 42 million borrowers, approximately 2 million people have accumulated debt that is over $100,000. Additionally, about 415,000 borrowers are in debt that totals more than $200,000.
It is important to note that the average student loan borrower has between $10,000 to $25,000 worth of debt. This amount of debt has permitted some individuals to enter into 10-year repayment plans to deal with their debt. Other borrowers that have large amounts of loans are often forced into income-driven repayment plans that could last several decades.
Unfortunately, if some borrowers are unable to pay for a period of time, they may accumulate additional debt in the form of high interest rates. That is why some individuals consider bankruptcy to avoid being mired in debt for much of their life. To learn more about how to discharge your student loan debt, you should continue reading and consult with an experienced Roseville bankruptcy attorney.
How to Discharge Student Loan Debt
Normally, filing for bankruptcy would not allow a debtor to discharge their student loan debt. This may seem strange as most forms of debt can be discharged or reorganized into a more manageable form when a person files for bankruptcy. The likely rationale behind the student loan bankruptcy discharge rule is that legislators were concerned that a student could earn an expensive degree and shun their responsibilities by filing for bankruptcy. Fortunately, some exceptions may allow a debtor to discharge student loan debt in bankruptcy.
Financial Hardship Test
The financial hardship test analyzes a borrower’s financial situation and various other circumstances on a case-by-case basis to determine whether they should be exempt from paying their student loans. Generally, three factors are considered for the financial hardship test:
- Whether the student loan borrower has a justifiable explanation for their financial hardship
- Whether the extenuating circumstances will not be resolved throughout the loan repayment term
- Whether the borrower has in good faith tried to pay off the loan
These elements may vary depending on which bankruptcy court is handling the proceedings. It is also important to note that you may not have to actually repay a portion of a loan to prove that you were trying to repay it.
To claim undue hardship, a student loan borrower must utilize an adversary proceeding. This process allows a debtor to claim that repaying their student loan would result in severe financial difficulty.
Outside of claiming an undue hardship, it is difficult to have your student loans discharged through a bankruptcy proceeding. Decades ago, borrowers would be able to discharge student loan debts along with other debts when filing for bankruptcy. However, some judges and legislators are beginning to look for alternative ways to alleviate the burden of student loans. For example, allowing a debtor to repay the debt in a Chapter 13 bankruptcy reorganization plan could be useful for borrowers who cannot afford their current monthly payments.
Bankruptcy is not a decision that should be made quickly. Our firm will walk you the through the benefits and problems of bankruptcy to help you make the choice that is right for you.
Our California Student Loan Debt Bankruptcy Attorneys are Ready to Work with You
If you or a family member want to know whether bankruptcy is the best choice for discharging student loan debt, you should contact an experienced California student loan bankruptcy attorney today. The Bankruptcy Group understands the frustration of dealing with insurmountable debt, and we are here to stand with you. Our attorneys will evaluate your unique situation and help you determine whether filing for bankruptcy is a good decision for you. To schedule a free legal consultation, call The Bankruptcy Group at 1-800 921-5351.