Having a student loan discharged in bankruptcy is not easy for the fact that they receive the same classification as child support and taxes, which means they are not dischargeable.
This is something that can be highly problematic for people having difficulty paying off their student loan debt. It is true that there are individuals out there that have graduated college and not found the career that they were looking for, thus causing them to be responsible for tens of thousands of dollars in college loan debt they can’t afford to repay.
There is also the fact that college loan debt counts against your debt-to-income ratio, which can make it difficult to buy a house or a car. Even if the loan is in forbearance, lenders still see the loan as part of your monthly budget. This is due to it being a future expense that will have to be paid. In other words, the bank is looking at your current and future ability to repay the loan.
Unfortunately, difficulty buying a house or car is not enough cause to have a student loan discharged in bankruptcy. There has to be a true hardship that is deemed as being very difficult to get out of. The student loan must cause an issue that affects your quality of life and it must be demonstrated that the only way to get out of the situation is to discharge the student loan. Then again, discharging the student loan may provide little relief, depending on the exact situation.
Yes, it has to be bad, which means it isn’t impossible to have a student loan discharged.
Unfortunately, every other option needs to be explored before student loan discharge can be an option.
But what happens if you default on your student loans?
Well, you are looking at the possibility of wage garnishment, tax refund seizure, federal benefit seizure, and inability to qualify for Pell grants or other student loans.
It is very important that you explore all of your options so that you can avoid the above consequences. You don’t want your student loan debt plaguing you throughout life when all you want to do is make your life better.
This is where an experienced bankruptcy attorney comes into play. It is a must to have your situation thoroughly evaluated so that you know what your options are. It can be easy to view the situation as hopeless when it isn’t. Many individuals are not aware of what they can do to handle their student loan debt. With an attorney helping you, you can see what your options are and you may learn that you are one of those rare individuals that could have your student loan debt discharged so you can improve your life.