Borrowing Money for School

What Are the Effects of Bankruptcy on Student Loans?

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In Brief...

During the 1970s, filing for bankruptcy and discharging student loans became popular for college graduates, especially before they started earning a monthly income. This includes the holder of your student loans, according to Student Loan Borrower Assistance. Future Ability to Obtain PLUS Loans Discharging your undergraduate student loans in a Chapter 7 bankruptcy can impact your ability to take out student loans in the future, if you have plans to return for an advanced degree. Undue Hardship Ruling and Discharge If repaying your student loans is posing an undue hardship on you ---- that is, paying your student loans and other expenses means you can't maintain even a minimal standard of living, the bankruptcy court can include the loans as part of the discharge of your loans in a Chapter 7 bankruptcy.. difficulty in maintaining a minimum standard of living during the repayment period of a Chapter 13 bankruptcy; repayment bars you from maintaining a minimum standard of living; and whether you made an effort to repay your student loan obligations before filing for bankruptcy.

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