How to Bankrupt Student Loans Hardship Discharge Bankruptcy Student Loan

How to Bankrupt Student Loans. A Louisville Kentucky Bankruptcy can discharge student loans.  This normally requires that you apply for the Ford income contingent loan program first.   If you are denied this loan or still cannot meet the loan payments you may obtain a hardship discharge.  

 
 
 

 

 

Nick C. Thompson

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Louisville, Kentucky

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How to Bankrupt  Student Loans Hardship Discharge in Bankruptcy

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After October 2005 both government and private student loans require a hardship discharge in bankruptcy.  Student loans can be discharged in Bankruptcy.  Learn how to qualify for student loan hardship discharges in bankruptcy.    

Yes student loans can be bankrupted if you qualify but it is very difficult.  Here is the National Public Radio report on the recent Francisco Espinosa case that bankrupted student loan interest.  The old rule was that Student loans could be bankrupted when they became 7 years old.  Now student loans can only be discharged in bankruptcy if you prove that repaying the loan is a hardship to you or your family. 

In most jurisdictions there is a 3 factor Brunner Bankruptcy test to see if you can discharge student loans.  You almost always qualify if you are at the poverty income level of income.  Here are the questions and the documents that you may be asked to provide if you want to attempt a hardship discharge.  You must also have exhausted all other ways to repay the loans.  Here are links to student loan information about student loans and disability, loan consolidation and the problems to avoid if you are attempting a student loan cancelation.    

The Brunner bankruptcy test requires that first, the student loan Debtor cannot maintain, based on current income and expenses, a "minimal" standard of income for himself and his dependants if he repays the student loans.  Second, that these circumstances will persist for a significant remainder of the student loan repayment period. And third, that the debtor has made a good faith effort to repay the student loans.  Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987

It will often be argued that you could have consolidated you loan with the Ford Student Loan Program which bases your payments on your income and discharges your student loan upon reaching age 60 or after 20 years.  You may not however have to apply for this loan prior to attempting a hardship discharge.   HEAL student  loans require a more difficult standard of shocking the consciousness.  However notice that the CEO of Sallie Mae for Student Loans earns the highest salary for any CEO in Washington DC while he requires extreme conditions for you to have a hardship discharge for others.

The Bankruptcy Manual discusses student loans and hardship discharge.  Download your free copy.   The Bankruptcy manual is for informational purposes only. The Bankruptcy Manual comes in rtf format for word or WordPerfect, pdf for adobe, or you can download the audio.

Kentucky Student Loan  Kentucky Hardship Discharge  

Indiana Student Loan Hardship Discharge  Bankruptcy Student Loan Hardship Discharge

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