As of June 2024, approximately 43.2 million were recorded to have student loan debt. This makes it the second-largest type of consumer debt in the country, with the largest being mortgage debt. This is all to say that you are not alone in your struggle to pay off your education. You are also not alone in your need to declare bankruptcy due to consumer debts like this one. With all that being said, please read on to discover whether you can discharge student loans in bankruptcy and how a seasoned Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you navigate your debts throughout these proceedings.
What does a “discharge” in bankruptcy mean?
Before anything else can be discussed, you must understand why many Americans feel inclined to file for consumer bankruptcies in the first place. Well, one of the most idealistic outcomes of bankruptcy proceedings is a discharge. Now, a discharge is a legal order made by the New York State bankruptcy court that essentially relieves you, the debtor, from your obligation to pay off certain debts. In other words, this means it permanently prevents your creditors from conducting any collection activities against you.
Such an order is usually made a few months after your initial bankruptcy filing. Specifically, for Chapter 7 bankruptcy, this may take place after four months, or longer if your trustee needs to sell your nonexempt assets. And for Chapter 13 bankruptcy, this may go into effect after you complete all your payments within your promised three- to five-year repayment plan.
Is it possible to discharge my student loans in bankruptcy?
Now that you understand the concept of a discharge, you must know what types of debts qualify for it in your bankruptcy proceedings. Particularly, your student loan debt may be discharged. However, it is no easy feat.
That is, to get the New York State bankruptcy court to agree to discharge your student loan debt, you may have to argue that having to repay them would cause an undue hardship. This is to say that it would cause you to fall below the minimum standard of living for a significant portion of the repayment period. With this, you may have to provide sufficient evidence that you made diligent efforts to pay off this outstanding debt well before your bankruptcy filing date.
Plus, discharging your student loans may require you to undergo a separate court proceeding. Namely, you may need to file an adversary proceeding within your bankruptcy case. Simply put, this is similar to a lawsuit process in which your outstanding creditors and other third parties may dispute your student loan issues.
To learn more about how to handle your student loan debt, please get in touch with a competent Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq. Better yet, schedule your free initial consultation with our firm today.
