Can I File Bankruptcy On Student Loans In Tennessee?
The increasing cost of college is causing many households in Tennessee to feel the pinch as they face paying for student loans. The mountain of student loan debt facing many people is robbing them of the opportunities they imagined would come with an education.
Discharging Student Loans In Bankruptcy
Many mistakenly believe that student loans cannot be eliminated through bankruptcy, either Chapter 7 or Chapter 13. However, bankruptcy law allows the discharge of a student loan if repayment imposes an undue hardship on you or your family.
What Is Undue Hardship?
Determining that repayment of a student loan causes an undue hardship and therefore is dischargeable entails looking at many factors. Some of these factors include whether you have made a good faith effort to maximize your income and minimize your expenses, whether you can maintain a minimal standard of living if forced to repay the loan, whether you have a permanent or long-term disability, a lack of assets, inability to find employment in the area studied, lack of marketable skills, whether these hardships will continue, and you have made a good faith effort to repay the loan or take advantage of any relief offered by the lender.
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Procedure To Seek A Discharge
The court must consider these factors when you file an adversary proceeding against the lender asking that you be relieved of the student loan. This is like any lawsuit where you file a complaint against the lender setting forth the factors favoring discharge, and they are given an opportunity to answer. Thereafter, a hearing is conducted to determine if requiring you to repay the student loans would be an undue hardship on you or your dependents.
Chapter 13 Student Loan Debt
In addition to the possibility of discharging a student loan, Chapter 13 can force the lender into repayment terms when the loan is not dischargeable. One possibility is to get back on track with the lender by curing the arrearage and resuming regular monthly payments. Delaying repayment of most of the loan is another possibility, or you may prefer to pay the student loan under the supervision of the Bankruptcy Court.
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We are a Title 11 debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. This ad does not create an attorney-client relationship until a written agreement is signed.