Many Tennessee residents have student loan debt and the inability to repay it. They are not alone. Millions of Americans are in the same position. What can they do about it? Can bankruptcy help?
Typically, student loan debt does not qualify for bankruptcy debt discharge. Typically. That does not mean it is not possible, and that does not mean it will always be that way. With so many people struggling to pay back their students loans, lawmakers are looking into viable debt relief options. In the meantime, what can people who are struggling to pay back their student loans do?
The student loan problem
According to a report from earlier this year, roughly 44 million Americans have student loan debt. The total owed collectively is over $1.5 trillion. The average amount owed per person is over $37,000. This debt category ranks second highest, behind mortgages and just ahead of credit card debt.
The bankruptcy solution
The truth of the matter is, student loans may qualify for debt discharge in specific cases. The key words here are may and specific cases. Those who can prove that the debt is creating an undue hardship may achieve debt discharge. To qualify for a hardship discharge, you must show the court:
- You tried to make payments.
- You are experiencing hardship due to any extenuating circumstance.
- This circumstance will not improve anytime in the near future.
If your student loan debt does not qualify for discharge, bankruptcy may still work for you. Depending on the type of bankruptcy you file, if it receives court approval, the bankruptcy will free up funds and allow you to put money toward your student loans.
Other debt relief options
If bankruptcy is not right for you, other debt relief options may be. Modifying the terms of your student loan may prove helpful in the long run. Paying down other debts and staying out of debt will certainly help the situation, but it is not always possible to do this. Legal counsel may be able to offer other suggestions.
Don’t let student loans get you down
You went to school, you earned your degree, and that is something of which to be proud. Do not let your student loans get you down. There may be a way to resolve your debt issues, with or without bankruptcy, so that you can get the fresh financial start you desire.