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Discharging student loans in a personal bankruptcy case

Birmingham residents, along with numerous other Americans, pursue college educations and training in the hopes of a better future. The pursuit of a college education, however, is costly. This year, the total amount of student loan debt exceeded $1 trillion. There is more student loan debt in the country than any other type of consumer debt. Many people in financial distress do not have the resources to repay their student loans. For this reason, many people often inquire into the ability to discharge student loan debt in bankruptcy.

However, it is very difficult - if not impossible - to discharge one's student loans under the current bankruptcy laws. Student loans can generally only be discharged if the person filing for bankruptcy can show that the burden of repaying the loans would impose an undue hardship on him or her. This is a very tough standard to meet. Courts look at several factors when someone tries to discharge his or her student loans. These factors include things such as health, age, income, expenses and the likelihood that the person's income problems will persist.

It is best to speak to an experienced attorney should an individual want to attempt to get his or her student loans discharged in bankruptcy. A separate court action will need to be filed, and an attorney can help people going through a situation such as this to make the most convincing argument as to why their student loans should be discharged.

Even if one is not a viable candidate to get a discharge of his or her student loan debt, a personal bankruptcy filing still offers many people a way to get a fresh financial start. A bankruptcy discharge can eliminate credit card debt and medical expenses, freeing up finances to make arrangements to repay one's student loans.

Source: U.S. News and World Report, "Allow private education loan debts to be erased in bankruptcy," Steve Cohen, Dec. 26, 2012

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