If you are a college graduate with considerable student loan debt, experienced Southaven, Mississippi, attorney Kevin F. O’Brien of O’Brien Law Firm, LLC, has honest answers to the question, “Can I discharge student loans in my consumer bankruptcy on a hardship basis?”
Student loans are usually nondischargeable in a consumer bankruptcy such as Chapter 7 and Chapter 13. In other words, after your bankruptcy satisfies your other debts, you will still have to repay student loan debt.
At O’Brien Law Firm, LLC, our lawyer makes you aware of all facts and every option that could help you with repayment of student loans after you graduate from college. Contact us today for a an initial consultation.
Your student loans could be discharged, or eliminated, if paying them creates an “undue hardship” for you and your family. You should be able to prove to the bankruptcy court that you are only earning enough to pay for a “minimal standard of living.” You should also be prepared to prove that your finances aren’t likely to improve over time.
A hardship discharge won’t happen automatically after a bankruptcy filing unless your attorney files an extra petition. This is called an “adversary proceeding.” It asks the court to make an exception in your case so that student loans can be erased.
When you file for Chapter 13, you agree to pay off your debts over a three- to five-year period. The court supervises your payments. Your student loan lenders cannot demand the repayment of the whole loan due at once. Each month, you give your bankruptcy trustee all your extra income, the trustee then divides that money among your creditors. This process can decrease your overall monthly payments considerably.
Do you have questions about the role of student loans in a consumer bankruptcy? If so, we have answers.
Kevin F. O’Brien is licensed to practice in Tennessee as well as Mississippi, in order to assist clients in the Greater Memphis area.
We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.