Discharge Student Loan?

Can you discharge student loan debt?  Maybe. Ordinarily student loans cannot be discharged through bankruptcy.  Meaning that student loan debt cannot be eliminated through a bankruptcy filing and discharge.  Other types of debt can be discharged, or eliminated, in bankruptcy.  But not student loans.  Usually, that is.

Student loans are on the rise.  The cost of college has risen way beyond the ability for almost anyone to afford it without the aid of debt.  That debt is normally backed by the government.  If you don’t pay the lender, the government will.  This, then, is why student loan debt is not normally discharged.  But there are some ways to discharge student loan debt.  Not a lot, but some.

To discharge student loan debt in bankruptcy typically takes a showing of extreme hardship.  Loss of a job is usually not enough.  More is needed.  Or at least more has been needed.  With the increased debts former students face, the loans themselves are becoming hardships themselves.  Times are changing.  Often times student loans are the reason why may need to file for bankruptcy.

To not discharge student loan debt would defeat the purpose of many bankruptcy filers.  That is why there a movement towards finding ways around the student loan bankruptcy exception.  Or at least broadening the meaning of hardship to allow borrowers to discharge student loans.  This Wall Street Journal article depicts the dilemma for many facing student loan debts and bankruptcy.

Without the ability to discharge student loan debt, borrowers may not afford to repay other debts.  Frequently it is why student loan borrowers have other debt.  That debt, though, my be discharged in bankruptcy.  Paying student loans with credit card may just replace one form of debt with another.  But credit card debt can be discharged in bankruptcy.  It is an increasingly common scenario for bankruptcy filer.  Can’t afford the student loans?  Take out credit card debt to cover it.

No matter the situation, debt is an almost inevitability for students.  Bankruptcy may be a way out.  Whether it is though eliminating the student loans or the other debts accrued to pay the student loans.  Enough is enough for far too many students.  Bankruptcy may be a way out.

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