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West Palm Beach Bankruptcy & Business Attorneys > > Bankruptcy Attorneys > Reconsidering Bankruptcy Myths And Student Loans

Reconsidering Bankruptcy Myths And Student Loans


There is new guidance for discharging student loans in bankruptcy, which means that debtors who have student loans and file for bankruptcy can expect a new process for showing that they have met the “undue hardship” requirement that is necessary to have student loan debt discharged in a consumer bankruptcy case. Given that there is new guidance from the Biden administration and the U.S. Department of Justice for the process of having student loan debt discharged in bankruptcy, it is important to revisit common bankruptcy myths concerning student loan debt. Our West Palm Beach bankruptcy lawyers can provide you with information that can help to clarify what you can and cannot expect if you file for bankruptcy and seek a discharge of your student loan debt.

Myth: Student Loans Debt is Non-Dischargeable in a Consumer Bankruptcy Case 

Fact: Now, even more than in months and years past, student loans can be discharged in a bankruptcy case. Even before the new guidance, debtors could be eligible to file for bankruptcy and have their student loans discharged, but the process was quite complicated and often required extensive time and money. The new guidance changes the process for determining whether a debtor meets the “undue hardship” requirement, and the new process makes it easier for the debtor to prove that they have met the undue hardship requirement.

Myth: New Guidance on Bankruptcy and Student Loans Changes the Requirements for a Discharge

Fact: It is important to be clear that the new guidance has not affected the underlying or central requirement for having student loan debt discharged in bankruptcy. To be clear, you must still meet the undue hardship requirement. What has changed, however, is the process for showing that you meet that requirement in order to have your student loan debt discharged.

Myth: My Student Loan Debt Can Only Be Discharged If I Am Currently Unemployed

Fact: You do not have to be unemployed or even underemployed in order to have student loan debt discharged in a bankruptcy proceeding. To meet the undue hardship requirement, you will fill out an attestation form that includes information about your current and likely future financial circumstances. The court will use this information to determine whether you would be unable to maintain a “minimal standard of living” if you had to continue making payments on your student loans, taking into account various allowable expenses. In addition, the information contained in your attestation form will include details about your attempts in the past to make a good faith effort to repay your student loans, which will also be a consideration in the possibility of discharging your student loans.

Contact a West Palm Beach Bankruptcy Lawyer 

Do you have questions about discharging student loan debt in bankruptcy? Do you have general questions about the bankruptcy process, or about your eligibility to file for Chapter 7 or Chapter 13 bankruptcy with your student loan debt? An experienced lawyer can help you. Anyone who has questions should reach out to one of the experienced West Palm Beach bankruptcy attorneys at Kelley Kaplan & Eller as soon as possible.



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