There are always rumors about legal proceedings, especially when bankruptcy is involved. Some of those rumors are based on fact but don’t offer the full picture. In the case of bankruptcy and student loan debt, there is a certain amount of truth to the rumors, but having the full story is far more useful.
While it is not the norm to file bankruptcy on student loans, it is possible to have student loan debt discharged along with the other debts that you include in your bankruptcy. This is one of the most important areas of bankruptcy proceedings, and it often requires the assistance of bankruptcy lawyers. Read more about Chapter 7 here (http://www.zerodownbankruptcy.com/bankruptcy-lawyer-st-petersburg-florida/chapter-7/).
Student Loan Adversary Proceeding
You don’t necessarily have to file bankruptcy on your student loan debt exactly when you file bankruptcy on your other debt obligations. Student loan debt requires separate paperwork known as an adversary proceeding. This additional paperwork can be filed even after your bankruptcy is discharged. Get more information about student loans here (http://www.zerodownbankruptcy.com/bankruptcy-news/loans/can-i-include-my-student-loans-in-my-bankruptcy/).
Undue Hardship and Student Loan Bankruptcy
The biggest factor determining whether your student loans can be discharged in your bankruptcy is your potential earnings. While you do not need to have an income below the poverty line, you do need to have limited potential for future earnings. Regardless of how you are earning money now, the court will look at your skills and what you could be doing.
For example, if you are painting pictures and selling them for five dollars apiece, the court might say you are limiting your own potential to make more money. On the other hand, if you work in an established trade and have topped out with no potential to earn more, the courts may determine that paying your student loans in addition to your basic living expenses would present an undue hardship for you.
Including Student Loans in Bankruptcy
As you can see, it is not impossible to include student loans in your bankruptcy, even after you have already filed. You will, however, need experienced bankruptcy lawyers to help demonstrate your financial limitations as they apply to your student loan payments. Even if your student loans are not discharged in the end, you may at least be able to stop payments while your bankruptcy is in process, giving you some temporary relief. In the meantime, it’s important not to default on them.
Importance of Bankruptcy Lawyers
There are many other situations and types of debt that consumers often don’t think they can include in their bankruptcy. However, in many cases an experienced lawyer can help you figure out the best way to deal with your debts and if you have any other options available.
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