Going to college is part of the American dream to get an education and prepare for a higher-paying skilled job. Taking out a student loan to help meet the cost of college tuition and other related fees made sense once upon a time.
Unfortunately, as the price of a college education has increased, the amount students are financing with loans has matched that increase. According to BestColleges, the average student loan debt a person carried in the U.S. in 2022 was $37,574.
Student loans have become an expensive way to pay for school, and that debt can have long-lasting implications for your future. If you’re one of the millions of Americans struggling with student loan debt, you’re not alone. Many graduates find themselves burdened with tens of thousands of dollars in debt, which can be difficult to manage after graduation, especially if they cannot find a high-paying job. Furthermore, if you borrowed but did not complete a degree, your potential earning power is significantly lessened.
Student loan debt can cause financial hardship, making it impossible to keep up with payments while paying for cost-of-living necessities and saving for the future. If you’re in this situation, you may wonder if bankruptcy is an option. Fortunately, bankruptcy can help with student loan debt in certain situations.
Bankruptcy can be an effective option to relieve debt and gain a handle on your financial health. New guidance in student loans and the use of bankruptcy to ease that debt was released in November 2022 and has made it easier for bankruptcy to address some student loans.
The new guidance provides more precise instructions for bankruptcy lawyers representing clients with student loans. They outline specific conditions that may allow borrowers to have their loans discharged in bankruptcy. These include proving that paying off the loans would cause “undue hardship” to the borrower and their dependents.
This can be a challenging standard to meet, so we feel it is essential to have experienced legal representation that is familiar with bankruptcy and how it applies to student loan debt.
We can review your financial situation with you and outline your options so you understand what solution may be best.
Even if your student loan situation does not qualify as undue hardship under federal guidelines, using bankruptcy to discharge other forms of debt can make it easier to pay off your student loans. Chapter 7 or Chapter 13 personal bankruptcy can often help relieve your overall burden of debt, allowing you to use your money to make regular payments on your education loans.
When you file for certain types of bankruptcy, certain unsecured debts, such as credit card debt or medical debt, can be discharged. Let us review how personal bankruptcy may be a good solution for you.
If you’re struggling to meet your financial obligations, including student loans, it may be time to talk with us. We will lay out your options and make sure you understand what the best solution is for you. Bankruptcy protection can provide relief and be a viable option for those struggling with debt. At Kain + Henehan, we are well prepared to give you sound legal advice, and if bankruptcy is right for you, we can take care of helping you file.
Facing the prospects of bankruptcy can be scary enough, so we make sure meeting with us is not. We are here to make you comfortable from the very first phone call. Please contact us by calling (612) 438-8006 or filling out the online form. See us to learn more about bankruptcy and your options.
Call or use the contact form below to get started with a free consultation.