Student Loan - Loans and Debt Consolidation

DISCHARGING STUDENT LOAN IN BANKRUPTCY REQUIRES MAJOR HARDSHIP

Discharging student loan in bankruptcy requires major hardship

By Tanisha Warner | CreditCards.com Mon, Jan 23, 2012 7:00 AM EST

Dear Credit Care, How can I file bankruptcy on my school loans? I dont have a job and havent had one in over a year. The loan company keeps adding interest to the back of my loans. I will never be able to catch up again. How can I clear that loan from my name? -- RJ

Dear RJ, Student loan debt is not easy to walk away from. In fact, private and federal student loans are not eligible for discharge in a bankruptcy filing unless you can prove that paying them would produce anundue hardship for you and your dependents. The burden to prove undue hardship varies from state to state and court district to court district.

You might consider doing some research and/or contacting a bankruptcy attorney to get advice. Keep in mind that in most cases you must prove three things for the loans to be considered an undue hardship.

If you do not meet all three of the above criteria, it may be difficult to prove to the court that paying your loans would cause undue hardship.

It sounds as if your loans may already be in default. However, if they are not and if you have federal loans, contact the Department of Education and d...[more]