The area of student loans has come to the forefront of a nationwide discussion about the debt burden on college graduates. The most recent reports show that student loan debt exceeds $1.47 trillion with over 44 million Americans owing that debt.
This student loan debt continues to rise:
In the past, the Bankruptcy Code allowed discharge of student loan debt that was older than 7 years, but in 1998, Congress changed that law and you must now show that payment of the debt “will impose an undue hardship on you and your dependents” to discharge the debt in a Chapter 7. The facts necessary to meet this standard are extremely difficult to meet. In the past 19 years, our firm has successfully been able to discharge just a handful of student loan obligations under this standard.
A Chapter 13 may, however, be used to get delinquent student loan debt under control. There are also other means of seeking a discharge of student loans including discharge on account of total and permanent disability, closed school discharge, identify theft or false certifications by the school. In addition to these discharges, there are other government programs that provide forgiveness of student loans based on employment in certain public sector fields. You should consult with your attorney and discuss what options may be available to you to discharge or forgive your student loan debt.