I Want to Have My Student Loans Discharged in Bankruptcy: Now What?

Are you considering bankruptcy and wondering whether you could be eligible to have your student loans discharged in bankruptcy? Millions of Americans currently have student loan debt. In fact, according to Best Colleges, at the end of 2022, approximately 43.5 million Americans had federal student loan debt, which is about 13 percent of the U.S. population. Of those with federal student loan debt, a majority owe between $20,000 and $40,000. Those figures do not include Americans who currently have private student loan debt and who are struggling to make those payments. While federal student loan payments have been paused since 2020, payments are scheduled to resume in 2023, and many debtors are concerned about how they will be able to afford the payments.

If you want to have your student loans discharged in bankruptcy, what will you need to do? Our Oak Park bankruptcy lawyers can provide you with more information about the steps you will need to take and how the recent guidance could make it easier for you to have your student loan debt discharged in your bankruptcy case.

Determine Your Eligibility for Bankruptcy and File

First, if you want to have your student loan debt discharged in bankruptcy, you will need to determine your eligibility for consumer bankruptcy. Once you know which type of bankruptcy you are eligible for, then you will need to file your bankruptcy petition along with all required schedules and documents. Determining eligibility for bankruptcy is something you should do with help from an attorney. Chapter 7 bankruptcy for individuals requires most individuals to pass the “means test” or to show that their income and assets are sufficiently limited in order to file for liquidation bankruptcy. Chapter 13 bankruptcy requires an individual to show that they earn a regular wage that will enable them to make debt reorganization payments over a period of years.

Talk With a Lawyer About the Undue Hardship Requirement

Next, you will need to discuss the “undue hardship” requirement with your lawyer. In order to have student loan debt discharged in bankruptcy, you will need to meet this requirement. The requirement is still in place with the recent guidance, but the new guidance makes it easier for debtors to show that they may qualify. In general, the undue hardship requirement asks debtors to prove that continuing to make student loan payments would constitute an undue hardship, that their situation is unlikely to change in the future, and that they have made a good faith effort to repay their student loans.

Complete the Attestation Form

How can a debtor prove that they meet the undue hardship requirement? Most of this information is now contained in an attestation form that the government will use to determine whether a debtor is likely to be eligible to have their student loan debt discharged. The attestation form will require you to provide a wide range of information about your finances and your history of student loans.

Seek Advice From an Oak Park Bankruptcy Lawyer Today

If you have any questions about the consumer bankruptcy process, including your options for having your student loans discharged in bankruptcy, it is important to get in touch with a lawyer who can help. One of the experienced Oak Park bankruptcy attorneys at our firm can talk with you today. We can learn more about your circumstances and can provide you with more information about moving forward with a bankruptcy case. Contact the Emerson Law Firm for more information about the services we provide to consumers.



See Related Blog Posts:

Top Things to Consider About Student Loans and Bankruptcy

Checklist for a Chapter 7 Bankruptcy

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