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Bankruptcy and Student Loans: Challenges and Considerations

When you are struggling to keep up with bills and keep digging yourself further and further into debt, you need to consider your options. It does not make sense to keep making the minimum payments and hoping things will get better. For many people, the answer to their financial problems is bankruptcy.

Bankruptcy can help eliminate various unsecured debts, including credit card bills, medical bills, personal loans, business debts, and utility bills. If you have student loans, like so many Americans, you may wonder if bankruptcy will help eliminate that debt.

It is possible, but it is not easy. Student loan debt is difficult to discharge. It is possible, though, but it requires additional steps and there are no guarantees.

First, you will need to file for Chapter 7 or Chapter 13 bankruptcy. Then you will need to file an adversary proceeding, which determines whether your debt should be discharged.

In the adversary proceeding, you will need to prove an undue hardship. Some examples include:

Keep in mind that the bankruptcy court will scrutinize your expenses to see if you are truly facing financial hardship. if your only debt is a student loan, your chances of discharge are low.

Alternatives to Bankruptcy

If your student loan debt cannot be discharged in bankruptcy, here are some other options:

Contact a West Palm Beach Bankruptcy Attorney Today

Student loans are difficult to discharge in bankruptcy. It is possible to do so, but there are extra steps involved. Is it worth it?

Brian K. McMahon, P.A. is a skilled West Palm Beach bankruptcy attorney who can assess your situation and help you understand your options. Bankruptcy may not be the answer. To schedule a consultation, fill out the online form or call (561) 658-1789. We serve the West Palm Beach, Boca Raton, Port St. Lucie, and South Florida areas.