Student Loans

STUDENT LOANS AND BANKRUPTCY

Student Loans Among Most Difficult Debts to Discharge When Filing Bankruptcy

As the U.S. bankruptcy law stands now, private student loans — credit-based student loans issued by private banks without the backing of the federal government — are grouped together with government-backed federal college loans under the category of “education loans,” which are exempt from discharge in bankruptcy in all but extreme cases.

In order to have one’s private student loans discharged in bankruptcy, a borrower must be able to show that repaying the loans would result in “undue hardship,” a legal standard that can be extremely difficult to meet.

In fact, the legal requirements for discharging education loans are so onerous to meet that most bankruptcy attorneys avoid the process altogether.

Lawmakers in both chambers of Congress have proposed legislation that would make private student loans eligible for discharge under U.S. bankruptcy laws, but this law has not yet passed.

Call the Cook Law Firm today to learn more and gain an understanding of your bankruptcy options.

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Bankruptcy Myths

One of the major benefits of filing for protection under bankruptcy is that creditor actions are stayed (which simply means stopped).

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At the Cook Law Firm, APLC, we understand that bad things happen to good people. That is why we are here to help you solve your debt problems.