Student Loans

I recently attended a seminar in Las Vegas devoted exclusively to student loans.  As staggering as this sum may sound, student loan debt  is now over $1 TRILLION DOLLARS.  Most people are aware that student loans are not typically dischargeable in bankruptcy.  In 2005, Congress passed sweeping amendments to the Bankruptcy Code.  As part of those amendments, the Bankruptcy Code vastly expanded the definitions of what wasn’t dischargeable from only government loans to private loans as well.  Ultimately, this means that most student loans can’t be discharged unless the restrictive standard of “undue hardship” is met.  The 6th Circuit (which encompasses Tennessee) adopted this standard in In re Oyler, 397 F.3d 382 (6th Cir. 2005).

However, that does not mean that bankruptcy can’t help you to overcome financial woes created by student loans.  Sometimes discharging your other debt through a Chapter 7 case can free up enough income in your budget to make payment on your student loans affordable.  A Chapter 13 bankruptcy will often give you a break from the often stringent repayment terms of student loans while you regroup financially.

I learned a lot of valuable information at the seminar.  I will be sharing that information over the coming months to help our current and prospective clients.