Everyone knows that student loan debt is a major problem in the United States. The average cost of a college degree is over $140,000, though that number is much higher for private schools. Therefore, it’s no surprise that the average college graduate faces about $30,000 of student loan debt upon graduation, and approximately 6% need to pay back a whopping $100,000.
But what happens if you can’t pay back those loans?
Can you discharge them in bankruptcy?
Combining those monthly payments with a mortgage, car payments and credit cards already stretch a tight budget. Add some unexpected expenses, and suddenly you can find yourself drowning in debt. Filing for bankruptcy seems like your best option. Still, you have always heard that student loans are generally considered “non-dischargeable” debts, meaning they cannot be eliminated by filing for bankruptcy. However, there are certain circumstances where you may be able to get your student loan debt discharged
For that to happen, you must provide evidence that repaying your loans would cause an “undue hardship.” This means that even if you made all of your payments on time and in full, it would still be impossible for you to maintain a minimal standard of living. The burden of proof is on the borrower to demonstrate this hardship.
Discharging student loan debt in bankruptcy is technically possible but very difficult. It requires a lot of paperwork and evidence. If you’re considering filing for bankruptcy due to overwhelming debt, including student loans, it’s essential to speak with someone who can talk you through this and any other available options.
