Do I Qualify for Student Loan Discharge in Bankruptcy?
You may be surprised to learn that student loans can actually be discharged in bankruptcy. And you don't necessarily have to be unemployed, disabled, or living in poverty to qualify.
For years, borrowers have been told that student loans are virtually impossible to discharge in bankruptcy. But that's not entirely true anymore.
Federal bankruptcy law allows borrowers to seek a discharge of student loans when repayment would impose an undue hardship on themselves and their dependents.
We help borrowers throughout Southwest Florida and across the state determine whether they may qualify for student loan relief.
What Qualifies as Undue Hardship for Student Loans?
In Florida, bankruptcy courts generally consider three factors when determining whether student loan repayment creates an undue hardship:
- Your current financial situation. Can you maintain a minimal standard of living for yourself and your dependents while repaying your student loans?
- Your future financial circumstances. Are your financial difficulties likely to continue for a significant portion of the repayment period?
- Your good-faith efforts. Have you made reasonable efforts to address your student loan obligations?
Every case is different. Having a job or earning an income does not automatically disqualify you from seeking student loan discharge.
What Changed Under the New Student Loan Bankruptcy Guidelines?
In November 2022, the federal government introduced a standardized process designed to make it easier for qualifying borrowers to demonstrate undue hardship.
Eligible borrowers may now use a financial attestation to provide information about their income, expenses, student loans, and financial circumstances.
The legal standard hasn't changed, but the process for evaluating certain federal student loan cases has become more structured.
Student loan discharge still generally requires a separate lawsuit within the bankruptcy case, known as an adversary proceeding, and the bankruptcy court ultimately determines whether the debt can be discharged.
What If I Already Filed Bankruptcy?
Here's something many borrowers don't realize: you may still have options even if your bankruptcy case closed years ago.
In certain circumstances, a previously closed Chapter 7 or Chapter 13 bankruptcy case may be reopened to pursue student loan discharge.
And you don't necessarily have to return to the attorney who handled your original bankruptcy.
Find Out Whether Your Student Loans May Qualify
At Lynn Law Group, attorneys Veronica Batt and Adrian Lynn help borrowers in Fort Myers, Cape Coral, Naples, Estero, Bonita Springs, and throughout Florida explore their student loan bankruptcy options.
If you're struggling with student loan debt, don't automatically assume bankruptcy can't help.
You deserve to know what your options are.
Contact Lynn Law Group to request a student loan discharge evaluation.