Student loan debt is a real problem. Latest statistics show that Americans are severely burdened by student loan debt as Americans owe almost $1.3 trillion dollars in student loan debt.1
As more and more Floridians find themselves attending college and postgraduate programs, more Floridians are using student loans in order to fund their continuing education. Receiving federal student loans requires that the borrower sign a promissory note. This note – one that can also require a cosigner – is an agreement to pay back the loan in full and with interest and failing to do so can lead to legal issues. While individuals may find themselves with higher levels of education than ever before, the current economic system can lead to an increased number of financial hardships if they cannot pay back their loans.
Students who are unable to overcome their financial hardships may seek relief through bankruptcy. Filing for Chapter 72 provides you with the promise of settling debts and starting anew. However, student loan debt only further complicates the bankruptcy process for hopeful filers. This is because student loan debts, especially those owed to the federal government, are much more difficult to discharge through bankruptcy.
However, discharging federally-funded student loan debt is not impossible in every situation. A borrower may be able to discharge his or her debt if he or she demonstrates to a court that the specific loan(s) have created an undue financial hardship. It is important to note that this outcome is rare, though an experienced bankruptcy attorney can identify when you may qualify for a hardship discharge.
Private student loan debt is often managed by an independent organization. These private student loans are the result of what is typically an agreement entered between two private parties. As such, privately funded loans may provide more opportunity to be discharged in a Chapter 7 bankruptcy filing.
Filing for Chapter 7 bankruptcy is both a stressful and complex decision that borrowers must make. When student loan debt is involved, the process becomes even more complex. As case law and rules regarding the dischargeability of student loan debt continue to change, it becomes more imperative to seek the advice and counsel of a bankruptcy attorney. Even if you cannot discharge your student loans, bankruptcy may free up funds to manage the payments in the future.
Consult a St. Petersburg Bankruptcy Attorney Today
The skilled and knowledgeable bankruptcy attorneys of Berkowitz & Myer can discuss your bankruptcy and dischargeability options. Call 727-344-0123 and schedule your consultation today.