Reality Check Regarding Student Loan Bankruptcy
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Reality Check Regarding Student Loan Bankruptcy

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Reality Check Regarding Student Loan Bankruptcy Reality Check Regarding Student Loan Bankruptcy Document Transcript

  • ==== ====For more information please go here:http://tinyurl.com/6qsm2oc==== ====Up until 2005, there were many more options for students who decided to declare bankruptcy inorder to avoid repayment of their student debt. However, borrowers bankruptcy options on studentloans have been cut to very few. Changes in the Bankruptcy Code in late 1998 made most studentloans non-dischargeable, which means that even if a student filed for bankruptcy, he/she wouldretain the loan and have to repay. This is regardless of the age of the loan unless the borrowercan prove "substantial hardship".Hardship means that repayment will create undue hardship the repayment of the loan will createan undue hardship on the debtor/borrower and his family. This is defined as the debtor cannotmaintain a minimally adequate standard of living and repay the loan with proof being theconditions are such that repayment and living at the minimum standard are impossible and thatthis situation is unlikely to improve substantially over time. Many undue hardship cases arecompared to the 1987 case argued before the U.S. Supreme of Marie BRUNNER, Appellant, v.the New York State Higher Education Services Corp., Appellee.There are less drastic methods besides student loan bankruptcy when you run into problemsfinancially. Aside from bankruptcy, a defaulted student loan can be rehabilitated, consolidated,stretched out or discharged if the default is because of disability. If it is not defaulted, then ask fora forbearance or deferment.If the borrower does reach the "wage garnishment" stage, some small comfort can be taken in thefact that federal regulations limit the amount of the student/borrowers garnishment to 10% of thetotal amount borrowed. Before reaching that stage, other options are available including contactingvarious agencies who can offer information on workouts and student loan consolidation programsfor loans in trouble, including a program of repayment based on income. Nolo Press and EdFundhave information on student loans. Carreon & Associates provides information defaultedloans and Consumer reports provides facts on graduated payments.While there are many reasons why student loan bankruptcy might seem a viable option, in todaysworld, it should be the last and not the first resort. In point of fact, the only thing that it will affect interms of debt reduction and the student loan is that it will reduce the borrowers other debts makingit easier to repay the student loan. As a result, unless there is no other option available, studentloan bankruptcy is not a good way to go unless all other bills and creditors involved need to beheld off. If the sole purpose of filing bankruptcy is to avoid repayment of student loan debt, it is notthe correct course of action.For more information on student loan bankruptcy, visit http://www.student-loan-zone.com
  • Article Source:http://EzineArticles.com/?expert=Rob_Hickey==== ====For more information please go here:http://tinyurl.com/6qsm2oc==== ====