How We Can Help
Recently, student loans have surpassed credit cards as the largest amount of unsecured debt owed in our country. Unlike medical bills, credit cards, and other unsecured debt, a student loan is generally not eligible for discharge in a bankruptcy. However, our Honolulu bankruptcy lawyers can help you understand your options and provide guidance on managing your student loan debt alongside other financial obligations.
How Can Bankruptcy Help with My Student Loans?
The vast majority of people with student loans will not be able to discharge their debt in bankruptcy. However, this does not mean that we cannot help you. If you file Chapter 13 bankruptcy, you will work out a payment plan with your lawyer and the bankruptcy court, which can include your student loans. This means that you will pay down the loan throughout the plan and receive a discharge of other unsecured debts. After completing the Chapter 13 payment plan, you will be in a better position to pay your student loans.
Additionally, upon filing for bankruptcy under either Chapter 13 or Chapter 7, all collection attempts from your student loan lender will halt. This means no more harassing telephone calls or letters, and you can stop wage garnishments or other forms of collection against you.
When Are Student Loans Dischargeable?
Although it is generally the case that a student loan is not dischargeable in bankruptcy, It’s not impossible. In certain extreme situations, you may argue that repaying the loan would put you through unimaginable and undue hardship. In the vast majority of cases, a person would need to demonstrate extraordinary circumstances to discharge a student loan.
The crux of the hardship discharge is to prove the following factors:
- Paying back the loan would make you unable to maintain a minimal standard of living
- Your current financial situation will remain in its current state for a number of years
- You have made a good faith effort to pay the loan
Student Loan Debt Settlement
Student loans are not as easily discharged in bankruptcy as other kinds of debt. However, we also offer debt settlement, which might be a good solution to easing your financial burdens.
A student loan can originate both from the federal government and private financial firms. The laws concerning how the loans are handled and collected can be more complicated than in other forms of debt settlement solutions. Though the lender may have their own repayment program, a bankruptcy lawyer may be able to negotiate a plan that is far easier on your wallet. It will allow you to maintain a comfortable standard of living while still making payments.
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