Student Loan Bankruptcy, When Are You Exempted

Student Loan Bankruptcy, When Are You Exempted

Under the bankruptcy laws, a student loan is considered a non dischargeable debt. This means that even if you were to declare bankruptcy for any other reason, the student loan will not be exempted. However there are situations where they can be declared as dischargeable debts. There are specific policies, rules and laws that you must follow. You must also be able to prove that you qualify for a student loan bankruptcy. This is different for almost everyone.
For you to qualify for this type of bankruptcy, you must be able to show that you have an undue hardship. If you are able to prove that you are physically incapable of working now and in the future, you probably have a chance to turn your student loan into a dischargeable debt. It is a very difficult thing to prove since you have to show that you are physically challenged to carry out any type of work.

You may also be required to prove that due your physical inability, it will be difficult to get any gainful employment soon. In addition you have to prove that there will be no hope of recovery. If you meet these rare qualifications then you can go for student loan bankruptcy.

You may file under chapter 13 and see some or most of your debt discharged. You will be expected to have your student loan consolidated. To qualify for chapter 13, you need proof of a regular income available that can repay at least most of your debt. Since the laws surrounding student loan bankruptcy are stringent it is advisable that you look for other alternatives to clear your debt.