Maui Student Loans & Bankruptcy Attorneys
Proudly Helping Clients Discharge Student Debt
A lot of debtors are unable to wipe out or discharge student loan debt under Chapter 7 and Chapter 13 bankruptcy, but there is an exception! If a debtor can prove to the court that repaying their student loan debts would cause undue hardship, then the debtor can get rid of their student loans in the case of bankruptcy.
Recently, student loans exceeded credit cards as the biggest amount of unsecured debt owed in the USA. Unlike credit cards, medical bills, and other unsecured debts, student loans are usually not dischargeable in bankruptcy. However, this does not mean you have to face harassing, non-stop phone calls from collection agencies and lenders.
Get Assistance From Our Skilled Attorneys in Maui
If you don’t know how to become debt-free when it comes to student loans, then all you need to do is to contact us. We have a team of highly professional and experienced bankruptcy lawyers who can help you to get rid of your student loan debt. No doubt there are a lot of bankruptcy law firms out there claiming to offer the best service. But, we are different from others in terms of the knowledge and experience we have in the field of bankruptcy. Our lawyers always stay up-to-date about the latest trends occurring in bankruptcy, which is why we can provide you with expert guidance.
What Is the Undue Hardship Exception?
In order to discharge student loan debt in bankruptcy, a debtor needs to prove that it would be an undue hardship for them to pay. Keep in mind that “undue hardship” interpretation can vary from individual to individual and thus, the bankruptcy court might examine your case or situation with the Brunner Test.
The bankruptcy court looks at numerous things to evaluate undue hardship in the Brunner Test. If you meet the following conditions, then your student loan can be discharged in bankruptcy:
- Good Faith: If you are able to make a good faith effort to repay your student loan debt, then you may become eligible to discharge your loan.
- Persistence: Your current financial condition is likely to continue for a remarkable portion of the repayment method.
- Poverty: As per your current expenses and income, you can’t uphold a minimal living standard for yourself and your loved ones if you are compelled to repay your student loan.
Although getting the bankruptcy court to remove your student loan debt is quite rare, wiping out your student loans isn’t impossible. In fact, if you are over the age of 40 or 50 or experiencing remarkable financial difficulties, then you may qualify.
Wiping Out Student Loan Debt in Bankruptcy
If you want to attempt to wipe out your loan in bankruptcy, then you need to file for an adversary proceeding to evaluate dischargeability with the bankruptcy court. However, things don’t end here. You will have to present evidence and prove that if you submit payment for your loans, then it would cause an “undue hardship”. If the bankruptcy court grants your request for “undue hardship”, then the following outcomes are possible:
- Your student loans might be completely discharged and you’ll no longer be accountable for the debt.
- Only a part of your student loans might be removed, and you will need to pay back your remaining debt.
- You are accountable for the complete amount, but they’ll lower the interest rate.
Contact our Maui bankruptcy attorney today to get help preparing for the adversary proceeding.