The Wall Street Journal recently reported that the class of 2011 is graduating with a record high amount of debt, averaging at about $22,900 per student. But let’s face it – recent graduates aren’t the only ones with student loan debt hanging over their heads. Many people, when faced with the challenges of the “real world,” find it difficult to pay off student loan debt in a timely manner. Factor in interest, and you’ve got a major debt on your hands.
Those considering filing for bankruptcy may wonder if their student loan debt will be discharged along with their other debts. Unfortunately, the answer isn’t always straightforward.
Student loans, in most cases, are nondischargable debts, meaning they will most often not be discharged when filing for bankruptcy. Under certain circumstances, however, your attorney may be able to work with you to help you prove that your student loan debt needs to be discharged. In order to do this, you will have to be able to prove that your student loan payments create an “undue hardship” for you and your family.
“Undue hardship” is difficult to prove, and it usually means that you are experiencing extreme circumstances, such as the inability to work, or the suffering of such severe financial hardship that you cannot meet even your most basic needs if you are forced to make payments toward your student loans.
The short answer to this question is that it is not impossible for your student loans to be discharged through filing bankruptcy, but that it is extremely difficult and fairly uncommon. You will need to speak to a highly qualified attorney about your specific circumstances in order to get a truly accurate answer.
If you have further questions about which of your debts can be discharged by filing bankruptcy, contact JacksonWhite for a free consultation. Arizona bankruptcy attorney Benjamin Skinner can be reached at (480) 648-8975.