Student loans can be a significant source of stress for Americans who have borrowed them, often draining the life out of individuals who have taken on massive debt to pursue their careers.
Bankruptcy courts ( Photo: Forbes )
Former students may be seeking to file for bankruptcy due to the overwhelming burden of paying off these loans
While it is possible to have student loans discharged through bankruptcy, the process is not easy, and not everyone is approved for it.
To apply for student loan discharge, individuals must file a separate action called an “adversary proceeding,” in which they must request that the bankruptcy court find that repaying their loans would impose an undue hardship on themselves and their dependents.
This process requires presenting evidence to the bankruptcy court and proving that repaying the loans would cause significant hardship. Creditors may be present to challenge the request.
Bankruptcy courts do not use a single test to determine undue hardship, but instead, consider a variety of factors. These include whether being forced to repay the loan would prevent the borrower from maintaining a minimal standard of living, whether the hardship is likely to continue for a significant portion of the loan repayment period, and whether the borrower has made a good faith effort to repay the loan before filing for bankruptcy.
If repaying the loan causes undue hardship, the loan may be fully discharged, and the borrower will not have to repay any portion of it
Alternatively, the loan may be partially discharged, and the borrower will be required to pay only a portion of it. In some cases, the borrower may be required to repay the loan under different terms that better suit their situation.
In summary, while it is possible to have student loans discharged through bankruptcy, the process is not straightforward, and not everyone is approved for it. Borrowers must prove to the bankruptcy court that repaying their loans would cause undue hardship, and there are many factors to consider.
However, for those struggling to repay their student loans, the option of seeking discharge through bankruptcy may provide some relief.
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