It seems that almost everyone in this country has one thing in common-student loans. You receive this extensive training, only to find out there are no jobs available in that field, and the skills are non-transferable.
Now, you are in a substantial amount of debt with no feasible way to re-pay it. Is bankruptcy the answer to your student loan problems? For most people the answer is likely no. The reason that student loan debts will survive the bankruptcy is because of Section 523(a)(8) of the Bankruptcy Code. Section 523 lays out exceptions to discharge, and among those debts that are non-dischargeable, are qualified educational loans.
Therefore, many student loan debts will not be automatically discharged in the bankruptcy. To discharge the student loan debt, an adversarial proceeding would need to be filed, and the discharge of those debts would need to be argued under the standard of undue hardship. The Bankruptcy Code is silent on what constitutes an undue hardship, but courts have developed tests to determine if those debts should be discharged. The basic question the courts are trying to answer is-can this individual re-pay this debt and still maintain a minimum standard of living.
This is where you will likely run into a problem. If your student loan payment is already income-driven or close to zero, it would be a difficult to argue that you cannot maintain a minimal standard of living while repaying your student loans.
Call Now for a Free Strategy Session from a MN Bankruptcy Lawyer at/from Kain & Scott
Going back to school or starting school is not a decision that should be taken lightly. Not only will you be foregoing current income, but you should be sufficiently satisfied that this education will allow you to earn a living and re-pay the loans. But if you have already incurred the debt you may have other options. Contact the attorneys at Kain and Scott and see us at www.kainscott.com.
