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Bankruptcy and Student Loans: Do they go together?

Can New Yorkers get their student loans discharged in bankruptcy?  You can certainly get most other debts discharged.  So why not student loans?

Because the student loan industry lobbied hard to make sure that student loans were listed as “non-dischargeable” when the 1978 Bankruptcy Code was written.  As a result, the only exception for getting a student loan discharged is “undue hardship.”  This is an extremely difficult standard to meet.  Essentially, you need to be disabled with no or little likelihood of earning income in the future.  Otherwise Bankruptcy Courts are unlikely allow it.

So is there any way at all that bankruptcy can be helpful to you in connection with student loans?

The answer is:  Possibly.

With a Chapter 13 filing, you may be able to consolidate your student loan debts together with other debts.  These debts are then all paid back over a 3 to 5 year period.  It doesn’t get your student loan discharged, as you could with other debts in a Chapter 7 filing.  But it may be possible to lower your payments.  And it does stop collection efforts by your student loan creditors for the duration of your Chapter 13 case.

If you’re not sure whether it makes sense for someone with your debt and your student loan debt situation to go ahead and file for bankruptcy, it’s a good idea to check with an experienced New York bankruptcy lawyer.

If you have any questions about bankruptcy and student loans, student loan debt or what happens to your student loans after bankruptcy, please feel free to contact Bruce Weiner, an experienced fair debt collection practices act, for a free initial consultation.

To learn more about student loans read “The Reality of Student Loans” and “The Consequences of Defaulting on Student Loans

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA

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