Tips from Minnesota Bankruptcy Attorneys- Behm Law Group
Student loans are generally understood to be “exempt” when it comes to bankruptcy protection. If you have student loans, you are required to pay them back in full, and the federal government has put rules into place to ensure that debt is collected. There are provisions that can help ease student loan debt, but the burden of proof is on you to prove you are in a position that makes it practically impossible for your to pay your loan. Filing for bankruptcy in Minnesota is a viable option. The Minnesota bankruptcy attorneys at Behm Law Group offer advice on how to navigate these tricky waters.
Student loan debt is a huge concern nationwide. As college tuition continues to skyrocket, hundreds of thousands of graduates and perhaps their parents are saddled with debilitating student loan debt that can equal or exceed the price of most starter home mortgages. Private and federal student loan debt exceeded credit card debt in 2010, hit the $1 trillion mark in 2011, and as of this year stands at $1.2 trillion dollars. Meanwhile the economy is struggling to regain past employment levels and starting wages are generally lower, leaving college graduates with burdensome debt and little opportunity to get back on track.
Up until 1976 all education loans could be discharged through bankruptcy. That year the bankruptcy code was changed which disallowed college or government loans to be discharged during the first five years of repayment. After five years of payment the loans could be discharged though bankruptcy or if “undue hardship” was being experienced by the borrower. In 2005 Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act which gave further protections to student loans, both federal and private, from bankruptcy protection. The only “door” left open for bankruptcy protection was if the borrower could demonstrate to the court that repayment of the student loan would cause an “undue hardship.”
Undue hardship can be exceptionally difficult to prove. Just the simple fact that you don’t have the funds available to pay your loan generally does not qualify as undue hardship.
Navigating through this complicated legal landscape is something best left to a professional bankruptcy attorney. Though full bankruptcy protection is still far from an attainable goal regarding most student loan debt, legal avenues do exist for at least a partial discharge of the overall debilitating debt burden that’s all too common for today’s college graduates.
Behm Law Group, Ltd. employs a professional team of bankruptcy attorneys who can help you through the daunting legal world of bankruptcy protection. With our years of dedicated training in the field of bankruptcy we can advise you about your student loan debt options and whether or not you meet the demanding criteria for having your student loans discharged through bankruptcy.
Serving Mankato, MN, and surrounding areas, Behm Law Group, Ltd. is available to help clients maneuver their way through financial difficulty and avoid the stress and uncertainty of unnecessary, burdensome debt. Contact Behm Law Group, Ltd. to discuss your bankruptcy options.