Student Loan Forgiveness Through Bankruptcy
Are Student Loans Discharged in Bankruptcy?
Student loans account for the second highest consumer debt category in the United States. The average college student graduating from an NYC university will have more than $37,000 in debt, just from undergrad. Yet, student debt can’t be discharged in most circumstances, which makes student loan forgiveness through bankruptcy a hot topic for an NYC bankruptcy lawyer.
Only in limited circumstances can student debt be discharged through Chapter 7 or Chapter 13 bankruptcy. An individual must show that undue financial hardship prevents repayment of a student loan. The evidence of undue hardship is submitted to the bankruptcy court in NYC in a special filing called an Adversary Proceeding.
NYC bankruptcy lawyer, Michelle Labayen, can efficiently and smoothly handle the explanation of undue financial hardship and the process for discharging your student debt through bankruptcy.
What Are the Requirements for Discharging Student Loans?
The eligibility for student loan forgiveness is restricted and narrow. Undue hardship is a high standard for the NYC bankruptcy court, and you need concrete and extensive evidence proving you suffered extenuating financial circumstances. To obtain and compile your evidence of undue hardship, you should hire an NYC lawyer.
If your repayment of student loans would prevent your ability to maintain a normal standard of living, then you have an argument for undue financial hardship in NYC. Under the interpretation of federal bankruptcy laws, undue financial hardship is:
- The borrower of the student loan has endured extenuating financial circumstances;
- These extenuating circumstances are expected to continue for the duration of repayment of a student loan; and
- The borrower made a good faith effort before filing for bankruptcy to repay the student loan in accordance with the monthly repayment schedule.
In a free initial consultation attorney Michelle Labayen will cover the eligibility requirements of undue financial hardship and discuss whether you qualify.
When Is Student Loan Forgiveness the Right Step?
Most people in NYC spend years, even over a decade, repaying student loans from undergrad and graduate degrees. What if you know repayment of this student debt is unlikely or impossible? It is time to discuss the possibility of student loan forgiveness through bankruptcy with an NYC lawyer.
You don’t want student loans to crush your financial future or make it impossible to obtain a normal standard of living. The bankruptcy court in NYC is also incentivized to prevent these extreme financial circumstances, which is why the process for student loan forgiveness through bankruptcy is available in New York.
However, the only time you should initiate a bankruptcy proceeding or request forgiveness of student loans is when repayment has become more than inconvenient, but rather impossible.
How Do You Ask the Court to Discharge Your Student Loans?
Before filing for Chapter 7 bankruptcy or reorganization under Chapter 13 bankruptcy in NYC, you should organize all evidence of undue financial hardship. This includes:
- Attempts to make the monthly installments on your student loan;
- Partial payment of a student loan installment;
- Requests to the lender for a workable payment plan; and
- Attempts to contact the lender for extensions or delaying repayment.
If you have a record of a good faith attempt to repay the loan and evidence of an ongoing and long-term financial difficulty, then you can file this evidence in the bankruptcy court through an Adversary Proceeding.
An Adversary Proceeding is a special filing in bankruptcy court that is best understood by an NYC lawyer.
Finding a Lawyer to Remove the Burden of Student Loans?
In the past, Michelle Labayen has successfully submitted Adversary Proceedings for multiple clients and represented individuals seeking student loan forgiveness through bankruptcy. Based on our prior experience, we walk you through the exact steps for filing an Adversary Proceeding and having it approved by the court.
Need to consider discharging student loans in bankruptcy?