Student Loan Consolidation and Bankruptcy Option Tips

For decades, government sponsored student loans have helped pave the
way for millions to get a college education. Following graduation, the
loans are repaid over a period of time, and usually with relatively
little difficulty. But as tuition has increased in recent years to
never-before-seen levels, and interest rates followed with it, and the
economy tanked, many former students are finding it impossible to
repay their loans. Many graduates have turned to bankruptcy to
eliminate credit card balances and other types of debt, but these same
graduates cannot expect to wash away their student loans in
bankruptcy.

Graduates with overwhelming student loan payments are in for a rude
awakening: Student loans cannot be discharged in bankruptcy. The law
as it was changed in 2005 affects the repayment of private and federal
student loans.

For many jobless graduates with lower than expected income–or none at
all–the heavy debt load from student loan obligations has played havoc
with their lives, leaving many to try to scrape by and pay loans that
in many cases resemble monthly home mortgage payments. Under the
current law there are situations where someone can claim a hardship in
a bankruptcy proceeding and have their loans discharged, but that's a
long shot.

The petitioner must show proof of undue hardship and file a separate
petition. The court will review the circumstances and in some cases,
if a person can prove he or she either doesn't have or expect to have
the income to repay the loans, the loans could be discharged.

If you're drowning in debt and overwhelmed by student loans, consult
with a bankruptcy attorney to see whether bankruptcy is a viable
option for you. Student loans may be difficult or next to impossible
to eliminate in bankruptcy, but that doesn't mean there aren't ways
for you to get debt relief