As a bankruptcy lawyer, I get a lot of calls about bankruptcy and student loans. Usually, these callers get good and bad news.
Bad News First
Student loans are typically not discharged through bankruptcy. That means you can't file bankruptcy just to get rid of student debt.
There are some exceptions under the "undue hardship" rule - like if you become paralyzed and can prove total inability to work or pay back the debt - but these exceptions are extremely rare.
In general, "undue hardship" doesn't mean poverty or lack of income. Some courts are a little more flexible with the definition, but most of us with student loans are expected to pay them back even if we never make a lot of money after college.
Now, the Good News
Bankruptcy is still an option for people with student debt. If you have any other bills you can't pay — medical bills, mortgage, utilities, credit card debt — bankruptcy can help.
In a bankruptcy, you can get rid of these debts and/or set up a payment plan according to your income, to make the bills easier to pay. It also stops any harassing creditor phone calls, wage garnishment, or threats of foreclosure.
That means you get a little breathing room. With your other debts covered, you can put more of your resources toward student loans.
Help with Kansas City Bankruptcy
If you're struggling with debts you can't pay, contact us today to get started on the road to financial freedom as soon as possible.
The longer you wait, the more your debt and interest will build up - and the harder it will be to pay off those student loans!
Castle Law Office has been handling bankruptcies for Kansas City clients from more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or you can email us and schedule your free consultation.