Take The First Step Toward A Fresh Financial Start

Understanding student loan debt and bankruptcy

On Behalf of | Jul 27, 2021 | Consumer Bankruptcy |

If you’re struggling to pay off your student loan debt in Illinois, you’re not alone. Our country has a combined total of $1.7 trillion in unpaid federal student loans, and it’s a problem that is felt throughout the entire country.

Temporary relief

During the recent lockdowns, paying off student loan debts became even harder for people who were out of work. The temporary relief measures that were set up to compensate for the economic downturn are scheduled to expire on September 30. Many people say that the temporary suspension of payments and interest charges should be extended.

Student loan debt and bankruptcy

If you have a monthly student loan bill that is about to kick in, you can’t rely on the hope that relief from the federal government could be extended. Filing for bankruptcy may provide the assurance that you really won’t be expected to make payments again.

Contrary to popular belief, it is possible for student loan debts to be discharged in bankruptcy. While it’s true that student loan bankruptcy is more complicated than a typical consumer bankruptcy case, it can be successful for the borrower. In fact, a majority of student loan borrowers who seek a discharge of their student loan debt receive relief.

Get help from a lawyer

Discharging student loan debt requires an extra step in the bankruptcy process that most people are not willing to take by themselves. The borrower must file a lawsuit to petition a judge to discharge his or her student loans, citing undue hardship as the reason for the petition. While this step may sound complicated to a person who is unfamiliar with the process, it is routine for a bankruptcy lawyer.