Discharging Student Loan Debt In Bankruptcy

In order to discharge a student loan debt in bankruptcy, it is necessary to prove an "undue hardship". The courts have ruled that "undue hardship" means something more than "garden variety" hardship. Bankruptcy courts across the county apply different formulas when determining whether undue financial hardship exists. In Minnesota, the court uses the "totality of the circumstances" test to determine undue hardship. The court can look at many factors, such whether the debtor has made a good faith effort to make payments on the student loan, whether the debtor could make payments on an income contingent repayment plan (if available), the debtor's prospects for earning a greater wage in the future, the debtors age and health, family obligations, how much benefit the debtor received from his or her education, and the size of the loan. To find out if your student loan debt qualifies for discharge in bankruptcy, contact your local bankruptcy attorney who is familiar with the undue hardship formulas used in your jurisdiction.

Consolidating your student loan is an option that may be available to you if a discharge in bankruptcy is not able to be obtained. This is beneficial if you are having trouble making your monthly payments, and have used up your forbearances and deferments, or if you want to avoid going into default altogether. In consolidating your student loan, you would be receiving a Direct Consolidation Loan. This is a federal loan made by the U.S. Dept. of Education that would combine one or more federal student loans into one new loan.

You are only eligible to consolidate your loans if you have graduated, left school, or dropped below half-time enrollment. There must be one Direct Loan or Federal Family Education Loan Program loan that is in a grace period or in repayment. Defaulted loans are able to be consolidated, but repayment arrangements must be made before consolidating, or you must agree to repay your new consolidated loan under the Income-Contingent Repayment Plan or the Income-Based Repayment Plan.

Matters surrounding student loan debt are often complex and require the assistance of someone knowledgeable in this field. Contact Minnesota Bankruptcy Attorney Gregory J. Wald for more information pertaining to your specific student loan matter.

Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com

Successful People Who Have Filed For Bankruptcy

Many people have a negative connotation associated with filing for bankruptcy. That thought needs to be dispelled. Bankruptcy protection was included in our Constitution to offer relief to debtors and to provide them the opportunity for a fresh start. Bankruptcy should be considered a new beginning for your family.

Many successful people have filed for bankruptcy, only to come back better than ever. A great example is Walt Disney. Because he received a fresh start, he was able to create the Disney empire we all know today. Other examples include Donald Trump's business, Mark Twain, Thomas Jefferson, Abraham Lincoln, Henry Ford, the founders of Hershey's Chocolate and Heinz Ketchup.

Dealing with the stress and emotional strain of creditors while struggling to make ends meet can take a serious toll on your health. Your daily pressures can leave you with negative emotions because of the state of your finances. Filing for bankruptcy is a step in gaining control of your life. Bankruptcy is a positive means to financial stability, and your emotional and physical health. Contact Minnesota Bankruptcy Attorney Gregory J. Wald for more information on giving your family a new beginning.

Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com