Student Loans And Chapter 13 Plans
Student loans cannot be discharged through a Chapter 13 bankruptcy case. Some attorneys say that they are difficult to get rid of, but not impossible. However, you will need to try very hard to get the loan off your back. You will need to prove that you will be put into extreme hardships, and your dependants will also go through the same. |
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The more pathetic you sound financially, the better the chances of getting rid of student loans. However, all information you provide should be substantiated.
Courts use different methods to test if the borrower really has hardships. The most common test used is the Brunner Test. Under this, you will need to show that you cannot meet your basic expenses with your current income while paying the student loan.
The present state of affairs is most likely to be considered, and it is possible that a significant amount of the loan is taken off. The past efforts to pay off the loan are considered, and if they are in good standing, then the loan may be taken off.
The bankruptcy process does not automatically discharge a student loan based on hardships. For that you will need to file a separate petition in order to get the court’s determination. In case you have already filed for bankruptcy and have not included the undue hardship, you will need to reopen the case to complete the filing along with the undue hardship. If you are lucky, you can do this without additional filing fees.
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