Are Some of My Student Loan Debts Dischargeable in Bankruptcy in New York City?

Unlike almost all other unsecured debts student loans can be difficult to eliminate through bankruptcy. A set of mostly unreasonable and inconsistent rules that were designed to address the problems of a bygone era prevent many student loans from being discharged in New York City today. Most consumer law experts agree that the special treatment student loans receive in the bankruptcy process is fundamentally unfair and in drastic need of review. With the rising student loan crisis in America it is unlikely that any time soon student loans will be treated like other unsecured debts in a bankruptcy case and will become fully dischargeable.

As of now however eliminating student loans through bankruptcy is very difficult, but not impossible. If you can demonstrate an “undue hardship” you may have your loan discharged in a bankruptcy case. The standard however is very strict, so unless you are pretty much bed ridden you will not qualify for an “undue hardship” in New York. It will depend on the specifics of your case, but most of our clients simply won’t have this option. However, bankruptcy can still help. While bankruptcy will not directly eliminate your student loan debts as of today, it will eliminate all of your other toxic debts making the student loan payments more affordable each month. Recent graduates are usually also faced with nasty credit card bills, personal loans, and maybe even medical debts (depending on your college experience). Bankruptcy will reduce your debts to only your student loans.

Another option is a Chapter 13 Bankrutpcy. This is a repayment plan over time. In a Chapter 13 you can make small monthly payments to a trustee eliminating all of your debts except student loans, some taxes, and certain other debts. However, while in a 13 you are not required to make payments on your student loans. Chapter 13 can last 3 or 5 years. Who knows, in 5 years the laws may have changed and you may be able to wipe out your student loans after your chapter 13 case.

The bottom line with student loans and bankruptcy is you should seek the advice of a bankruptcy attorney if you are unable to make ends meet and are struggling with student loan debt. Bankruptcy is about improving your overall financial situation. Sometimes it can be worth filing bankruptcy even if your most bothersome student loan can’t be eliminated. Every case is different and student loans are tricky. There is a growing public awareness of the double standard that surrounds bankruptcy and student loans, and student loans are responsible for some of the biggest debt problems in New York City today. There are ways out, but you need a professional. If you are feeling overwhelmed with your student loans and you live in New York City contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today. We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 10/7/2015.

**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients. Attorney advertising. We are a debt relief agency. We help people file for Bankrutpcy.