Interesting discussion on school loans and personal bankruptcy in the Huffington Post. Personally, it took me more than 20 years to pay off my law school loans (6 of them) of nearly $125,000- and that was with a 2 income household. Unless you can prove to a judge that paying a school loan is causing you “undue hardship” – which is very different than just “hardship” – you cannot discharge that student loan debt in a bankruptcy. Years ago, former President Clinton put a cap on federal student loan interest of about 8 percent for struggling students after adroitly realizing that 6 months after a student graduates – these loans become due. In this economy – you think a student is going to find a job in 6 months? And the job needs to pay for the student loans and food and clothes etc! For my clients who have student loans, sometimes we file a Chapter 13 bankruptcy plan, which gets the student loan people off of their backs for at least 5 years. This gives a client time to pay off a portion of their student loan debt while giving them the breathing room to increase their income – without any threatening phone calls or verbal harassment from creditors.
Bennett Cunningham is a Bankruptcy Attorney licensed in Texas and is a former Investigative Reporter for the CBS Television Station in Dallas. Mr. Cunningham has garnered 7 Regional Emmy Awards, including the Best Investigative Reporter in Texas 2 years in a row, as well as several National Awards for his exposés into the mismanagement of taxpayer dollars and government waste.
This blog is not meant to give you legal advice. If you need to seek legal advice, you should consult a licensed attorney in your jurisdiction.