There is an interesting article out about discharging student loans in bankruptcy in the Huffington Post. Generally, to obtain a discharge of your student loans in a chapter 7 bankruptcy proceeding the debtor must be able successfully show three things:
- A current inability to repay the loans
- A future inability to repay the loans
- And a good faith effort to repay the loans once they became due
Although the research states that roughly 4 out of 10 proceed, there is still support for pursuing the claim. It is highly likely that even if the bankruptcy court refuses to discharge the student loans, an amenable agreement with the student loan lender could be made to settle the outstanding balance. This can be of immeasurable benefit to debtors as it can avoid the ongoing late fees, interest, etc.
Victoria Spodek is a bankruptcy attorney with Spodek Law Group P.C. Our office is located at 100 Church Street, 8th Floor New York, NY 10007 and we can be reached 24/7 at (212) 300-5196.