The quick answer is that student loans typically are not dischargeable in bankruptcy. Can student loans be wiped out if you file for bankruptcy.
can i file bankruptcy on student loan debt
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It is possible to discharge federal and private student loans in bankruptcy but its more difficult than.
Can i file bankruptcy on student loan debt. You must prove you have little disposable income available to pay off your debt. Assuming you can discharge your student loan debt by proving hardship bankruptcy may be a good option for you. Can you discharge your student loans in bankruptcy.
Most unsecured debt can get wiped out. Currently the laws about federal student loan bankruptcy discharges state that you cant wipe out your loans unless theyre so expensive and youre so impoverished that they may literally lead to your death by placing an undue hardship on your ability to cover costs for basic needs like food and shelter. Its a common misconception that you cant file for bankruptcy for student loans.
Before we talk about whether student debt can be wiped out by bankruptcy. For example a bankruptcy can remain part of your credit history for ten years. It is a good idea to first consult with a lawyer or other professional to understand other pros and cons associated with bankruptcy.
Student loan debt may be eligible for discharge. A recent study by lendedu an online. Raising defenses to student loan debt in bankruptcy.
Some cant explain the rationale for the student loan no bankruptcy exception but others say it grew from a concern that student loan borrowers could take advantage of bankruptcy laws borrow a. Examples include breach of contract unfair or deceptive business practices or fraud. You might have defenses to payment of your student loan debt particularly if you attended a vocational or trade school.
When and how to file bankruptcy for student loans its difficult but not completely impossible to have student loan debt discharged after filing for bankruptcy. Many student loan borrowers struggle to make their monthly payments which may prompt some to wonder whether they can file for bankruptcy for student loans. Below is a breakdown of some of the qualifications and how each type of bankruptcy treats student loan debt.
If you succeed you wont owe the debt at all making the dischargeability issue moot. Its one of the most googled student loan questions. The process can take about four months.
Our picks of the best student loan providers can help you.