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Student loan debt affects millions of Americans all over the nation. As a result, many people wonder whether this debt is dischargeable according to current bankruptcy laws. Fortunately for residents of Stuttgart, AR, the Bueker Law Firm can address this and other pressing questions to ensure their clients make the best decisions for their legal needs.

Can Student Loans Be Discharged By Filing for Bankruptcy?

Most Student Loan Debt Can’t Be Discharged

While bankruptcy statutes allowed for the discharge of student loan debt in the past, changes to the law have made it much more difficult to do so. The key factor in this change was the level of income of debtors involved in the case. To this end, it was established that the income of debtors was sufficient to make payments on their student loans without incurring further financial hardship.

bankruptyAdditionally, due to the preponderance of available options to mitigate student loan debt, many courts feel a full discharge is not usually warranted. Debtors can consolidate their loans for a lower interest rate, defer their loans, or apply for a forbearance.  

Undue Hardship Designations Are Possible

While it is unlikely for student loan debt to be discharged through the Chapter 7 bankruptcy process, qualifying for undue hardship is possible in some cases. Undue hardship is characterized as dipping below the poverty level as a result of paying back debt. In most cases, a court will encourage the debtor to pay back a portion of the loan unless some other mitigating circumstance is present. For instance, if a debtor is afflicted with a serious illness or incapacitated by injury, the court may consider discharging student loan debt.

Schedule your consultation with a bankruptcy attorney in Stuttgart by calling (870) 673-1313 today. You can also visit the website for more information on their full range of legal services, which will help you get your finances back on track.  

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