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Student Loan Debt and Bankruptcy: What Are Your Options?

Student Loan Debt and Bankruptcy: What Are Your Options?

Student loans can create a variety of financial problems when there are too many competing financial responsibilities at once. This leaves many people wondering what their options are for escaping student loan debt. A common myth is that student loans can never be discharged in bankruptcy, but this may not always be the case. Find out if your student loan debt can be discharged by talking to a Chattanooga bankruptcy attorney.

Financial Challenges from Student Loans

Several financial challenges can come up while trying to pay back student loans. Some of the most common student loan financial challenges revolve around not being able to afford the high monthly payments. This is because student loans are not the only bills after college.

Multiple financial responsibilities can come up after graduating from college. Rent, car payments, groceries, gas money, and other debts can all add up and become overwhelming. On top of these expenses, many people want to enjoy life and may also need money for expenses related to entertainment, traveling, socializing, and hobbies.

Finding a job after college can be a major barrier to being able to start paying back student loans right away. This creates financial instability on top of having to continue paying other bills. Many people struggle to make room for student loans during times of unstable income or unexpected expenses.

Bankruptcy Options for Student Loans

Many people have been falsely led to believe that no one can ever discharge student loans in bankruptcy. The reality is that student loan discharge is challenging but not impossible to accomplish. Certain circumstances, if proven to the court, can allow the possibility of a student loan discharge through bankruptcy.

Usually, the circumstances that need to be proven are facing undue hardships because of the student loans themselves. Creditors that you owe the student loans to may challenge your claim in court. You will be expected to prove undue hardship by showing that the student loans will prevent you from maintaining your standard of living.

You will also be expected to prove that the student loans will continue to cause this financial hardship. Be prepared to demonstrate how you have already made good-faith attempts to pay back the student loans. The court will take all of these factors into consideration.

When it comes to student loan bankruptcy, the judge will ultimately decide whether to discharge all of your student loans or only a portion of these loans. Do not panic if the judge decides to not discharge your student loans because you may have other options. A judge can still make modifications to lower the monthly payments and interest rates. If this fails, you can also try income-driven repayment plans.

Contact Tom Bible Law Today

Dealing with overwhelming student loan debt on top of other bills can be stressful. You can call us at Tom Bible Law by dialing (423) 424-3116 for a consultation today to explore your financial options. Our legal team of Tennessee bankruptcy lawyers can work with you to find various options for discharging student loans through bankruptcy. We can be found throughout the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.

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