Can Student Loans Ever Be Discharged?
Contrary to common perception, not all student loans can be wiped out in bankruptcy court. Although the Bankruptcy Code does protect federal loans and some private loans from discharge, student loans can be discharged if the debtor can prove an “undue hardship,” which usually means you’re living in poverty and not likely to escape any time soon.
And some private loans are not protected at all. The law considers “qualified education loans” to be those for students attending school at least half-time, at an accredited school, and then only for tuition, room and board, and books for classes. Unqualified loans, which can extend into the hundreds of thousands of dollars, can be discharged in any case.
So how does a bankruptcy attorney help their clients determine whether they can discharge student loans? One way is to use some new software that helps you analyze if your student loan can be discharged. Best Case Student Loan Analyzer is a that performs an evaluation of the debt and helps determine if the loan is dischargeable. The analyzer’s features include:
- Institutional Lookup, which provides statistics like a school’s cost of attendance and accreditation status
- Jurisdictional Scorecard, which shows statistics based on jurisdiction, circuit and judge
- What’s Next checklists at every step of the analysis that provides a coaching element
- A case library with corresponding retainer agreements, letters, complains and motions
- Information on how to bill for such cases, and how the timeline rolls out
- Thoughts about how to help past clients who should have had discharges
- Options for clients who don’t qualify for a complete discharge
The software analyzer can help you give a second chance to previous clients and bring in new ones. While not all of them are able to discharge loans, some are able instead to reduce interest rates, settle or restructure their loans, adding to their financial well-being. If you are planning to start a business or apply for loans, and you are burdened with student loans, it is a good idea to figure out where you stand with your student loan obligations and determine if there are other options for you.