Education loan Discharge in Bankruptcy: Why It’s So Very Hard and What Can Be Done

Education loan Discharge in Bankruptcy: Why It’s So Very Hard and What Can Be Done

You are feeling weighed down by the duty of financial obligation to your point so it’s affecting other areas in your life. You wonder “can you file bankruptcy on student education loans?”

Many individuals think student education loans can’t be released in bankruptcy. But there’s a little loophole that makes it possible. It’s unusual, but if you’re considering this program, discover how student and bankruptcy loans work.

The annals of student and bankruptcy loans

Back when you look at the good old fashioned times before 1976, bankruptcy had been a choice for both federal and student that is private. As time went on, though, legislation changed. In 1998, federal student education loans had been considered nondischargeable — except in case of “undue difficulty” ( more about that later).

Beginning in 2005, personal figuratively speaking had been also made nondischargeable by Congress.

Due to these noticeable changes, it is been nearly impossible for education loan borrowers to obtain their loans released in bankruptcy. (more…)

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