Student loan bankruptcy filing is nearly impossible.

Student loan bankruptcy filing is nearly impossible. "Prior to the 1990s, the bankruptcy code permitted bankruptcy filers to include student loans. When too many people attempted to avoid repaying federal lenders, it became a pervasive problem. As a result of the government's losses, the criteria for discharging student loans were modified in 1998 in an effort to stop this costly practice. Many can empathize with college graduates who begin their careers saddled with tens of thousands of dollars in debt, but the fact remains that government-backed education loans enable many young Americans to pursue lucrative careers in the future. Morally, borrowers of student loans are obligated to honor their contractual agreement and repay the lender. Since Congress's 1998 ruling, individuals filing for bankruptcy and attempting to discharge school loans must satisfy three stringent requirements. Initially, they must demonstrate that repaying the debt would impose ""undue hardship"" on them and their dependents, thereby jeopardizing their ability to maintain a minimum standard of living.Next, individuals filing for bankruptcy must file a motion and demonstrate to the court that it would be excessively difficult for them to maintain financial solvency due to the length of time it would take to repay educational debts based on their current and prospective income. Lastly, they will be required to provide proof of payments and repayment efforts for at least five years prior to registering for bankruptcy. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 restructured the criteria for non-dischargeable student debt, making it more difficult for individuals to declare bankruptcy on their student loans.Due to the economy and the availability of employment, student loans have become a significant concern for many college students who are unable to meet their financial obligations. By the time a student graduates from college or university, they may owe between $30,000 and $50,000 in federally backed student loans, not including money borrowed from private institutions or credit cards. The U.S. Department of Education reports that nearly 5% of graduates default on their education loans within two years of graduation. Due to the high cost of attending college, a recession, and a dismal post-graduation employment market, many college graduates are saddled with substantial debt before they can begin their careers and become prosperous.Student loans harm not only the graduates' financial future, but also that of their parents. When considering a home mortgage or co-signing for federal, state, or private student aid, parents should exercise caution. In the event of default, they may also be at risk of financial failure or even foreclosure. Numerous undergraduates fail to plan for their financial future, and campus life offers few resources to assist them. Basic amenities such as food, clothing, and shelter are taken for granted in the college environment, and credit card abuse is prevalent. By the conclusion of their first year of college, most college students have received numerous offers from major credit card companies to apply for plastic, and they take full advantage. If you wish to celebrate, simply charge it. If you must buy school supplies on credit, do so. Minimum payments are scarcely met, and interest continues to accrue. But as soon as the lights go out on commencement day, the harsh reality sets in, leaving nothing but unmanageable credit card debt. Without experience, only low-paying entry-level positions are available. Even with a bachelor's degree, salaries are insufficient to cover the interest accrued on student loans over the past four to six years. As reality sets in, many graduates feel their only option is to file for bankruptcy in the hope that their debts will be discharged prior to earning a substantial income.
" - https://www.affordablecebu.com/