Student Loans By Larence Hubert At Isnare.com Ezine Articles

Student loans are extremely difficult to have discharged when filing bankruptcy. They have to be filed as an undue hardship in which you must be incapable of working now and in the future. If you would like to discharge your student loans under the undue hardship exception, you must file a separate motion with the bankruptcy court and then appear before the judge to explain your hardship. If filing chapter 7 bankruptcy this is the case. If in fact you are filing chapter 13, you can have your student loans consolidated into payments that are set up by the court. The student loans are not discharged and you do have to pay them off out of pocket. You are given a period of time to pay off your debts. This is often a basic time frame of five years.

It is complicated and nearly impossible to discharge student loans in bankruptcy. In order to understand what may be your best option in paying off your student loan, it is suggested to speak to a bankruptcy attorney. They may have other solutions entirely, that can keep you from filing bankruptcy all together. Another option for advice is to speak to a debt consolidation representative. They are trained and experienced in student loans and other forms of debt assistance. Once you do find the route in which you choose to pay off your loans you will be thankful to be free from the payments and debt.

Former students often wonder, when considering filing for bankruptcy, about their student loans. They want to know if their loans will be included in the bankruptcy or not. In 1998 there was a law passed that makes almost no student loans fall under a bankruptcy claim. So, ultimately even if you file for bankruptcy you’ll be stuck with your student loans still.

The law was established because many students were taking out student loans for amounts much higher than what they actually needed. Then they’d graduate and file for bankruptcy to get their loans nullified. Today filing bankruptcy will not eliminate the need for repayment of college loans. However, the reduction of debt might make it easier and allow the former student to pay their loans without financial stress.

There are a few areas where student’s loans can be forgotten in a bankruptcy. If the person filing for bankruptcy can show that paying their student loan would create an undue hardship, they can often include it in the bankruptcy. In addition, if the repayment would stretch over a long period of time, it may be included. Lastly, if it seems to the court that the student has really tried to pay off the loan over an extended period of time (usually between 3-5 years), and still can’t make the payments without financial stress, the student loan may be included in the bankruptcy.

While some believe that Chapter 7 is the answer to all of their problems, the sad reality shows otherwise. Impaired credit, high interest credit cards, years of battling negative credit notations, and of course the temptation to run up all the credit one has just shed are but a few of the pitfalls bankruptcy discharges may unleash on the unwary debtor.

Bankruptcy advice that might scare you straight hopes to prevent you from filing for Chapter 7 if there is even the remotest chance of effecting debt repayment in any other way. It is painful, but it might just help you!

First and foremost, know what you are up against. Too many are lured into contemplating bankruptcy because they do not know exactly how much they owe to whom and when confronted with the actual numbers might realize that their situation is not nearly as dire as they thought.

If your debts are as bad as you thought – or worse – cut out of your budget anything and everything that is not vital to survival; this refers to your gym membership, cable TV, membership at the YMCA, and so forth. Once you trim the fat from your budget, see how much you have to allocate toward debt payments.

No bit of bankruptcy advice would be complete by suggesting that prior to even thinking of filing for bankruptcy you should liquidate whatever assets you can and then use the money to pay off or at least lessen your outstanding financial obligations. Even if it only makes a small dent in your overall debts, the fact that having gotten rid of some outstanding balances and thus allowed you to forego a bankruptcy filing altogether is perhaps the best bankruptcy advice of all

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