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Can You Discharge Student Loans in Bankruptcy?

Love them or hate them (let’s be honest, you probably hate them), student loans are a fact of life for millions of Americans. Loans we took out in our late teens and early twenties can burden us for the rest of our lives, making it difficult to make other major purchases like a home or a car.

Many clients ask if they can discharge their student loans in bankruptcy. Historically, the answer would have been no—but times are changing, and there is some hope on the horizon.

Proving Undue Hardship

Undue hardship means that it’s difficult, if not impossible, to pay your loans back. It is extremely hard to prove that your student loans present an “undue hardship,” but it is possible. It’s smart to work with an experienced bankruptcy attorney for the best results. He or she may be able to make an argument based on your past relationship with the loan and/or based on your income and expenses that some or all of the loan might be discharged.

Potential New Legislation

Don’t lose hope. As you may know, President Biden has been in the news because he and our new Secretary of Education are “looking into” the legality of canceling up to $50,000 in student loans for everyone. There have also been proposals to attack student loan debt by Biden, and others, and to expand the forgiveness of student loans after a certain amount of years if a certain percentage has been paid. Additionally, Senator Elizabeth Warren has introduced a bill that would get rid of the exemptions for discharging student loan debt in bankruptcy. If either of these legislative options come to pass, it would be a breath of fresh air for many.

The best way to find out whether you can get your loans discharged is to work with a skilled bankruptcy attorney. Call Dworken & Bernstein to determine your options for discharging debt in bankruptcy.

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