Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
Serving all of Middle Tennessee's Bankruptcy Needs

Is it even possible to discharge your student loans?

Student loan debt is a burdensome problem for which there is no easy solution. Decades of teaching students that the only real source of upward mobility came from a college diploma has resulted in increased demand for college admissions and a drastic rise in the number of people carrying student loan debt in pursuit of an education and a good career.

Many young professionals have to delay buying a house, having children or even getting married indefinitely because of the debt they incurred while going to college. Although some student loan programs offer flexible repayment options based on income, the overall amount of debt, which can often be many tens of thousands of dollars, can drain your financial resources and make it very hard for you to move forward in life.

Quite a few people aspire to discharge their student loans in bankruptcy, only to realize that doing so isn't as easily discharged as other forms of unsecured debt.

Student loan debt has special protections under federal law

The push to get more kids into higher education occurred not just at grade schools and high schools but also within the government. To promote lending to would-be college students, lawmakers changed bankruptcy statutes, making it difficult to discharge standard student loans in individual bankruptcy proceedings.

To secure the discharge of student loan debt, students have to establish that the repayment presents an undue hardship for them and their financial dependent, such as their children. They have to demonstrate that circumstances complicate their ability to repay the debt and that they have made a real effort to do so already. Proving all of that and claiming undue hardship requires an adversarial hearing.

What happens in an adversarial hearing?

When you file for Chapter 7 or 13 bankruptcy protections and want to discharge your student loans, you will have to go through more steps than the average person filing for bankruptcy. Requesting an adversarial hearing is an important step toward qualifying your student loans as potentially dischargeable debts.

During this hearing, both you and your lawyer, as well as a representative or attorney from the lender, will have the chance to present evidence to the state. Just having to pay a large amount of debt back in and of itself won't qualify as undue hardship. Circumstances in which the courts may consider an undue hardship are rare.

An example of a potentially successful claim could involve a degree that requires physical activity and a borrower who has since suffered a debilitating injury or illness. Some people challenge the validity of the debt at the hearing by proving that the school has since closed or failed to secure the necessary accreditation as an institution of higher learning.

Attempting to discharge student loan debt in bankruptcy proceedings will substantially extend and complicate the process. Even those with the intelligence and competence to file basic bankruptcy documents on their own may not be able to handle the unique requirements of attempting to discharge student loans. If you believe that your circumstances may validate or support your attempt to discharge your debts, discussing your wishes with an attorney could certainly help

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Nashville, TN 37219

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