Obtaining Discharge of Student Loans Through Bankruptcy

Obtaining Discharge of Student Loans Through Bankruptcy "Student loans are among the most challenging types of debt to expunge in bankruptcy. Congress has designed the student loan programs to provide students with a great deal of repayment flexibility. Congress has also requested that the private institutions and creditors providing the loans be exceedingly flexible in terms of loan collection. In exchange for this flexibility, they have informed the bankruptcy courts that they expect repayment of these loans. Taking a cue from Congress, the courts will require you to demonstrate extreme hardship in order to have your student loan discharged. And it is uncommon.Extreme hardship, which is required for student loan cancellation, is difficult to prove. You must first initiate a separate court action to demonstrate that you are experiencing extreme hardship. Unless you are prepared to spend a significant amount of time in a law library, you should probably hire an attorney to file this motion. If the court does not rule in your favor, filing for bankruptcy to have your student loans discharged is a waste of time because it will almost undoubtedly be denied. Nonetheless, if the court rules in your favor, you have a chance of succeeding in bankruptcy court. However, it is better not to get your hopes up.So, what criteria do courts use to determine if a case involves genuine hardship? They base their initial determination on your income and expenses. If you can demonstrate that you are incapable of meeting even the most basic living requirements, you will likely pass this first test. Numerous college graduates who lost their residences due to unforeseen circumstances and are now homeless are a prime example. The second criterion is that there is no indication that your current circumstance will change. In other words, if you are currently homeless but have recently started a job that could soon get you off the streets, your prospects are improving and your hardship request is likely to be denied.Before ruling in your favor, the courts will also consider whether you have made sincere efforts to repay the loan. Your case is likely to fail if you have not even attempted to search for or obtain employment. However, if you satisfy all three of these requirements, you have a strong chance of winning your hardship case.
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