Obtaining a bachelor’s degree or an advanced one is an effective way to achieve the American dream. Still, with the high cost of higher education, you may need to take out loans to pay tuition, fees and other expenses. You are far from alone, of course, as most students end up with roughly $30,000 in student loan debt.
Your monthly student loan payments may be exceedingly expensive. Still, falling behind on your academic debt is an easy way to ruin your credit. Despite what you may have heard, it may be possible for you to discharge your student loan debt during bankruptcy.
The notion that it is impossible to address student loans during bankruptcy is a myth. In fact, if you can prove that paying your student loans is likely to cause you undue hardship, your debt may be dischargeable. While there is no go-to definition for “undue hardship,” many bankruptcy courts consider the following factors:
- Whether paying your student loans leaves you with sufficient financial resources to have a minimal standard of living
- Whether your current financial situation is likely to improve during the repayment term for your student loans
- Whether you have made a good-faith effort to repay your student loan debt
Even if the bankruptcy court decides not to discharge your student loan debt, filing for bankruptcy may be advantageous for paying off your loans. After all, if the court discharges your other debts, you are likely to have more money to put toward your academic debt.
Ultimately, if you are struggling to make ends meet or have fallen behind on your student loan payments, looking into bankruptcy protection and other debt-relief options may be a good idea.