Can You Discharge Your Student Loans Through Bankruptcy?
It's usually assumed that discharging student loans through bankruptcy is impossible. But this isn't necessarily true. Student loans can be discharged through bankruptcy, but only in certain situations. Here's what you need to know about attempting to discharge your student loans during the process.
Get More Information About Your Loans
Federal loans and private loans are handled differently. In general, federal loans can be very easily handled through the government itself, even if they are not entirely discharged. There are also other options such as federal-loan forgiveness. For most people, discharging student loans simply isn't necessary. But discharging a private student loan can be. A private student loan isn't eligible for the same programs.
Declare the Right Type of Bankruptcy
There are two types of bankruptcy available. One type of bankruptcy is a complete settlement of your debts. Another type of bankruptcy is a debt-management plan that makes it easier for you to pay your debts. The only way you will be able to discharge your debts is if you are declaring a type of bankruptcy that involves a complete settlement.
Collect Your Income Information
In order to discharge your student loans, you need to be able to show that they are causing you significant financial hardship. In other words, you need to show that you are not able to pay your student loans without suffering, such as by being below the poverty line. You need to collect all of your income information: pay stubs, tax returns, and anything else. Remember that all your income counts, including incidental and hobby income.
Get Any Medical Documentation
Many individuals are able to discharge their student loans because they have certain issues that preclude them from increasing their income. Medical documentation shows additional hardships that aren't shown in the amount of money they are making. It is possible to discharge student loans without chronic or significant medical issues, but it can be much harder. The medical issues that you are experiencing should be issues that will last the duration of the loan itself; otherwise, it may be easier for you to delay repayment rather than go through the process of bankruptcy.
Add Your Student Loans to the Filing
It shouldn't be assumed that student loans are taken into consideration automatically. In fact, student loans are very rarely added to the bankruptcy process even if they should be. Make sure that your bankruptcy attorney has included these loans in the filing itself.
A bankruptcy attorney such as Stuart R Whitehair Attorney can tell you more about whether your student loans may be discharged through this process. But it's important to note that even if they can't be discharged, it doesn't hurt to ask about them. Including student loans on your bankruptcy forms won't introduce any significant issues or delays.
