Going to school and obtaining a higher education is becoming more and more crucial to finding a good job these days. Because of this, the activity in taking out student loans and seeking financial aid to help pay for school has skyrocketed over the last several years. After leaving college, paying back those loans can be difficult on top of mortgages, car payments, and other things that come along with life. Sometimes student loans and bankruptcy must be looked at as an option.
As with any bankruptcy, each individual should look at their situation through a lens of their own, and determine what is best for them. But for someone who is struggling to pay back student loans for whatever reason, bankruptcy should at least be in their sights as an option that could help relieve some stress.
According to many Student Loan Borrower Assistance, it’s actually quite difficult to be granted bankruptcy with student loans. A borrower that wishes to declare bankruptcy with their student loans must prove to a court that they have an undue hardship. This can include proof that one couldn’t provide for themselves and family minimally if they are required to pay back their loans. Sometimes proving that hardship is not an easy thing to do.
Some instances that may grant a student loan bankruptcy
- A borrower attends a school that did not give them any benefit as far as education and what they paid for (illegitimate school).
- An individual is reaching retirement age and is still not earning enough to pay back loans that are due and support their family. Medical expenses could also be considered here.
- An individual has shown action regarding loans by asking about a more affordable repayment plan.
Instances that might not grant student loan bankruptcy
- An individual refusing to seek a higher paying job, even though qualifications may warrant a higher paying career.
- Some medical problems such as alcoholism will not sway a court to grant bankruptcy, according to SLBA. These instances, however, can be hit-or-miss depending on the case. It would be smart to have more than just alcoholism as a reason for wanting to declare bankruptcy.
Repaying student loans is a stressful, hard thing to complete. If you are having trouble paying back your loans, contact us today in order to discuss your options and get your finances back on track.