Most courts are reluctant to eliminate student loans in bankruptcy. You have to prove that you are unable to work and have no prospects of getting a job due to a disability. Congress has made it difficult to discharge student loans. You must prove an “undue hardship” by paying it back.
The bankruptcy judge will not be able to rule on the student loan issue. You must file a separate motion with the court and present your case before a judge. In the past, very few lawyers have successfully eliminated student loans in bankruptcy.
Myth
In recent years, some bankruptcy judges are discharging some, if not all, of student debt, calling it a myth that you cannot discharge student loans. Depending on what judge, and what jurisdiction you are in has a large part to do with how much if any of your student debt will be discharged. Private lenders for student loans are easier to get removed then government loans in bankruptcy.
Lower Interest Rate
Even if part of your loan is eliminated, sometimes you can get a better interest rate that makes it easier to pay on the remainder of the loan. Also, by filing bankruptcy, your unsecured debt like credit cards, medical bills, payday loans, and back utility bills will be eliminated, giving you more money to pay on the debt that cannot be discharged in bankruptcy.
If you have overwhelming student loans and would like to find out if you can eliminate them, contact a Hidalgo County bankruptcy attorney today.