Philadelphia Student Loan Bankruptcy Lawyer
Student loan debt is a massive financial problem for millions of young adults and their families. If you are struggling with your day-to-day finances because of excessive student loan debt, you should know that you are not alone. You should also know that solutions may be available to help reduce what you owe, or even wipe out your debt completely. For example, you may be able to erase college debt by filing for bankruptcy with help from a Philadelphia bankruptcy attorney. Depending on the circumstances, other possibilities include debt settlement, debt consolidation, and other alternatives to bankruptcy.
While bankruptcy can help you wipe out the debts that are causing you hardship, it is unwise to tackle the filing process without assistance. Bankruptcy laws are very complex – particularly when it comes to the discharge of student loan debt – and filers in Pennsylvania must fulfill numerous requirements. Failure to meet or comply with these requirements could compromise your ability to get rid of your debts. Serious errors could even lead to the dismissal of your case.
Before you file bankruptcy in Philadelphia, make sure you have guidance from an experienced bankruptcy law firm you can trust. For a free legal consultation, call Sadek and Cooper Law Offices, LLC at (215) 995-2543 today.
Can You Get Rid of Student Loan Debt by Filing for Bankruptcy?
There are many benefits to filing bankruptcy. For example, filing for bankruptcy immediately triggers the “automatic stay,” a period when creditors cannot initiate debt collection proceedings against you. Bankruptcy can also help you keep possessions that might otherwise be repossessed. However, the greatest advantage of filing for bankruptcy is arguably the relief from debt.
Not all debts are treated the same in bankruptcy. When a person files bankruptcy in Philadelphia, his or her debts are divided into two categories:
- Dischargeable debts, or debts that can be wiped out by the bankruptcy court. When the case ends, the filer’s dischargeable debts continue to exist, but the filer is no longer responsible for paying them off.
- Non-dischargeable debts, or debts that cannot be wiped out by the bankruptcy court. When the case ends, the filer’s non-dischargeable debts will continue to exist, and the filer will still be responsible for paying them off.
Student loan debt is normally a non-dischargeable debt, which means that in most cases, bankruptcy does not erase debts related to student borrowing. There are, however, exceptions to this rule. Depending on how much debt you owe, and how severely the debt is impacting you financially, the bankruptcy court may agree to discharge your student loan debts.
For this to occur, you must meet specific criteria referred to as the “Brunner test.” Bankruptcy courts use the Brunner test to evaluate the financial impacts of a filer’s student loan debt. If the court finds that the filer has been impacted adversely, that the situation is unlikely to change, and that the filer has made sincere payment efforts prior to filing bankruptcy, the court may agree to relieve the debt. Specifically, the filer must show the court that:
- The filer – or, where applicable, the filer’s dependents – cannot maintain a “minimal” standard of living because of the debt.
- The present situation is unlikely to change at any time during the repayment period – for example, because the debtor does not anticipate a raise or promotion.
- The filer has made reasonable efforts to make full and timely payments to the best of his or her financial ability.
To reiterate, bankruptcy courts in Pennsylvania generally do not discharge student loan debt. If college loan debt is the main reason you are filing for bankruptcy, it is crucial that you are represented by a knowledgeable attorney who understands how to present clear, compelling, and comprehensive evidence of the financial hardship your debt has caused. Without strategic legal representation, you are unlikely to obtain the discharge you are seeking.
Other Dischargeable Debts in Bankruptcy
Student loan debt may or may not be dischargeable, depending on the details of the case. Debts related to income taxes also belong in this category, and require a case-by-case assessment from the court. Otherwise, dischargeable debts in bankruptcy typically include:
- Business Debt
- Credit Card Debt
- Medical Debt
- Personal Loan Debt
The following types of debts are always non-dischargeable in bankruptcy:
- Alimony (Spousal Support)
- Child Support
- Non-Income Tax Debts
Philadelphia Student Loan Bankruptcy Attorneys for Chapter 7 and 13
Skillful representation can make the difference between keeping your student loan debts, and wiping the slate clean. If attending college or university has left you burdened with costly education debt, our bankruptcy lawyers can work to help you restore your finances and regain your freedom. For a free legal consultation with the Philadelphia student loan debt attorneys of Sadek and Cooper Law Offices, LLC, contact our law offices at (215) 995-2543 today.