One thing that most students are familiar with is debt. There are very few people that can get through years of higher education without compiling some kind of debt. Schooling is expensive and since it can be difficult to pay for living expenses, tuition, books, and recreation, students may be forced to take out student loans to pay for their education. One of the problems with student loan debt is that there is nothing to back it up in case of non payment.
This is different than a mortgage or a car loan because in the case of both of those types of loan, the lender has something that they can physically take if the borrower is unable to pay the loan back in a timely manner. When students continue to borrow money for school, not realizing how difficult it may be to pay the debt back, they can quickly find themselves with more debt than they can handle even after they have a fairly high paying job after graduation. One option that some people may need to consider is bankruptcy, although it may not be very viable for student loans. Students with student loan debt may find it difficult to rid themselves of the school debt as it is much more difficult to discharge student debt by bankruptcy.
One of the main reasons that bankruptcy is not an option for student loans is the fact that federal loans for students are not dischargeable through bankruptcy. Any loan that you take out for schooling, if given by the federal government through programs like the free application for federal student aid, cannot be discharged when you file for bankruptcy and will still have to be paid back in full. In October 1994 the government changed the federal laws about a former student having to prove “undue hardship” on themselves and his or her dependants in order to discharge a loan and made it basically impossible to satisfy all of the requirements for discharge.
There are alternatives to filing bankruptcy because of student loans so you should be willing to speak with a lawyer about your options.
There are some exceptions that would allow a student to get their student loan deferred including the school closing while the person was enrolled, the student being on an approved leave of absence when the school closed, disability, and the school closing within 90 days of withdrawal from the school. One other situation where the loan would be completely discharged would be if the borrower died.
These regulations can be difficult to understand and even harder to meet, so it is important for you to get some help on the alternatives to bankruptcy. One place that you can turn for this help is a San Antonio bankruptcy lawyer. A bankruptcy lawyer will be able to help you through the process of bankruptcy and answer any question that you have about eligibility and discharging different types of loans through bankruptcy. Do your research and find a bankruptcy lawyer that has the experience necessary to help you in understanding the laws and meeting the requirements of your debt repayment plan.
About the Author: Jeff Davis is the Owner of the Davis law firm, and a highly experienced San Antonio bankruptcy attorney. To find out more information about a San Antonio bankruptcy lawyer, please visit www.jeffdavislawfirm.com.