Student Loan and Bankruptcy Attorneys in Florida
Serving Jacksonville, Jacksonville Beach and clients throughout Florida
Student loans are not typically eligible for discharge in Chapter 7 or Chapter 13 bankruptcy. But, if you can prove that paying back those loans would cause undue financial hardship to you, then you may be able to erase those loans for good.
The process for filing for bankruptcy with heavy student loan debt is not easy and should be left to a professional with experience in these types of cases. The Student Loan Attorneys Florida at Hardesty, Tyde, Green & Ashton can help you with your past due student loans. Even if you do not qualify for discharge, we may be able to work something in your bankruptcy case that structures the payments to something you can afford.
What is Undue Hardship
To have your student loan debt discharged in bankruptcy, you must prove that it would cause undue hardship if you were to repay them. This test is very strict and not easy to pass. Just some of the ways the court will scrutinize your financial situation include:
- Institution Assessment – If you have a low income and your debt comes from a for-profit school, then the courts may be more willing to discharge debts than a non-profit school.
- The Brunner Test – You may have to complete the Brunner test, which assess your good faith (such as whether or not you have ever attempted to repay the debts), your persistence (including how much longer your financial situation will last), and your poverty levels (including current expenses and income and how that affects your quality of life).
- Circumstances Test – This will look at relevant factors in your bankruptcy case to see how long your undue hardship would last.
Discharging Student Debts in Chapter 7 Bankruptcy
Courts look at the undue hardship test above all else, because they want proof you will really encounter hardship if they force you to repay your loans. If you do not qualify for long-term hardship, then it is unlikely they will approve you for a full discharge, but that doesn’t mean you are out of options.
Raising Your Defenses
The team at Hardesty, Tyde, Green & Ashton can help you protect your rights. If you have the right defense against paying back student loans, then you may have a case for discharge. For example, if the school breached a contract, used unfair or deceptive business practices, or even fraud, then you may have a case for discharge.
Chapter 13 Bankruptcies Can Help You
Another option is Chapter 13 bankruptcy. While you will not fully discharge the debts, you can consolidate them into a single payment, which may make it easier to get back on track financially and still pay off your debts.
In Chapter 13, student loans are treated as no priority unsecured debts, which means they are just like credit cards and other medical bills. You are not required to pay them off in full through your Chapter 13 repayment plan, but they will receive an amount to reduce the debt owed.
Some ways that Chapter 13 can help you with your student loans include:
- Providing you with an automatic stay. This means that the collectors cannot continue collecting on past due student loans. They must stop harassing you or using any collection efforts to get the loan repaid.
- Delays student loan repayments. With Chapter 13 bankruptcy, you do not have to make regular loan payments while you are going through the Chapter 13 process. Then, you will make payments as they are laid out in your repayment plan, and you must stick to the terms within that plan for a successful Chapter 13 case.
- You can reduce how much you pay each month. Some students find themselves paying hundreds of dollars in student loan debts. But, with Chapter 13, they may be able to reduce how much they pay each month, making their debt easier to tackle.
Need to Discharge Student Loan Debt? Contact Our Team of Student Loan Attorneys Now!
While there are ways to get rid of student debts or at least reduce their burden, you need the experience of a bankruptcy lawyers Jacksonville to see if you even qualify. The team at Hardesty, Tyde, Green & Ashton can help you with your student loan debts. If you don’t qualify for discharge, we may still be able to include your student loan debts within your Chapter 13 repayment plan so that you can get on track.
Call us today for a free, no obligation consultation by dialing 904-398-2212 or visit us online.