Student Loan Debt Driving You to Bankruptcy?

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A commonplace nightmare amongst the college students of today is getting trapped in student loan debt. Tuitions can costs thousands, if not hundreds of thousands, of dollars, and it can be a real struggle to pay off any loans. If you are in this very same scenario and do not know what to do, take solace in knowing that you are not alone and there is help out there for you.

Contact a Boca Raton bankruptcy attorney from the Law Offices of David Kovari, P.A. when you are facing student loans and bankruptcy.

Why Bankruptcy Might Not Discharge Your Student Loan Debt

Many American students each year are filing for bankruptcy as their debt pushes them far beyond their financial limit. While filing for bankruptcy will create an automatic stay – creditors will not be able to harass you for payment and your wages cannot be garnished – it is only a temporary solution; once your bankruptcy case is resolved, the automatic stay disappears.

There is also nothing that guarantees that bankruptcy, either Chapter 7 or otherwise, will fully or partially eliminate your student loans. Unlike many other financial issues, student debt is not given any priority in a bankruptcy case. This means that your payments or properties that are involved with your bankruptcy are unlikely to be used towards paying off your student loans. If you are approved for bankruptcy, when everything is said and done, you could very likely still be faced with your untouched student loan debt.

Understanding Undue Hardship

In most cases, you will have to prove to a judge that your student loan debt is putting you in “undue hardship.” To do so, you must provide extensive financial records, employment histories, proof of your loans or debt, and much more documentation. It is absolutely encouraged that you retain a bankruptcy attorney for this process.

With a solid case, you may be able to prove that you are in undue hardship, which means:

  • You cannot maintain a minimal standard of living if you keep repaying your loans
  • Your difficulties will persist for most of the debt’s existence and several years after it is paid
  • You have earnestly tried to repay the loan but still cannot

Boca Raton Bankruptcy Attorney Finding the Right Solution

If you do not want to pursue proving undue hardship, our firm can help you find other resolutions to your situation. In particular, filing for Chapter 13 can provide you with much needed relief by reevaluating how much you owe and how you can fairly pay it off over the course of several years. If you are approved for Chapter 13 bankruptcy, it will determine your student loan payments, not your lender.

At the Law Offices of David Kovari, P.A., we have devoted over 20 years of our legal practice to helping people just like you find fair and amicable solutions to their student loan debts and bankruptcy cases. If you are ready to take the next step in solving your financial worries, do not hesitate to contact us today.

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