The Truth About Student Loan Debt and Bankruptcy

Student loan debt is what we have done to our children. The promise to the children is this: go to school, get a degree, and make more money and have a better life right? The price tag for this promise? Crippling student loan debt that can survive your death even. Like a gimmicky infomercial that promises some get-rich-quick scheme, colleges are infomercials on steroids. The price tag for an infomercial product or service may be 2-10k. The price tag for a college degree can easily exceed 100k. And who gets duped in the end and left holding the bag for this empty promise? You!

     Student loan debt is not dischargeable in bankruptcy. The only exception to this is if you sue the student loan company and convince a bankruptcy judge to issue an order discharging your student loan debt because if you don’t, it would cause you an undue hardship. So like at a casino, you get to go first with putting up your large investment for a lawyer without any guarantee that you will convince a judge to issue the order you need. 

     To make matters even worse, your politicians have decided that while student loan debt is not dischargeable in bankruptcy, student loan debt is also not a priority debt either. So if you have 100k in credit card debt and 100k in student loan debt, any proceeds coming into the bankruptcy estate get spread equally between both debt groups even though your student loan debt will not get discharged. What gives with that?? Plus, if you proffer a Chapter 13 plan where you propose to pay on your student loan debt, the plan will draw an objection from your trustee! What? It is pathetic but true. 

     For helpful information on student loan debt, go to www.studentdebtcrisis.org. 

                                                                   CONCLUSION

     When the time is right, or when you are ready, reach out to Minnesota’s LARGEST bankruptcy law firm at www.kainscott.com. You will be so glad you did!