Student Loan Debt

Chicago Student Loan Debt Lawyer

Take Control of Your Debt

College tuitions just keep getting higher, and students incur incredible amounts of debt in trying to further their education and get a degree. On top of that, there is no guarantee that a student will be able to find a well-paying job upon graduation, adding to the stress of paying off the loan. Failure to successfully handle your debt could result in wage garnishments, a lien on your tax refunds, and other repercussions you can't afford.

If you find yourself in this situation, you would benefit by contacting a Chicago bankruptcy lawyer to find out how you can regain control. The legal team at Smith Ortiz, P.C. has the knowledge and skills to guide you through the best solutions for your specific financial situation.

Proving Undue Hardship for Student Loan Debt Discharge

Chapter 7 bankruptcy essentially wipes out almost all unsecured debt, such as medical bills and credit card debt. It does not, however, easily get rid of student loan debt. The exception is when you are able to prove "undue hardship" imposed due to your loan debt. This is very difficult to prove in most cases; even if you live below the poverty line, the court is not easily swayed to allow bankruptcy to discharge student loan debt. You will have to undergo the Brunner Test through the court, which will determine if you qualify for undue hardship.

The three main factors in this test that would cause the court to approve the discharge of your student loan debt are:

  1. You can prove you are living at or below the poverty level, and because you have to make student loan payments, your income is not enough to live on.
  2. You can show that a current life circumstance, such as bad health, is causing severe financial hardship and that the condition is not likely to end soon.
  3. You have a track record showing that you have been working diligently to pay off your loans for a long period of time, indicating you have been acting in good faith.

Talk to Our Chicago Bankruptcy Attorneys About Your Options

Even if the court does not approve your petition for undue hardship, it's possible that the discharging of other debt through bankruptcy now allows you to have enough money left to manage your student loan payments easily. There is also the possibility of Chapter 13 bankruptcy, which reorganizes your finances so that you are able to make payments to creditors. There can be additional solutions to student loan debt as well. Our firm, with over 26 years of combined experience, is very familiar with all the possible options to resolve the problem of student loan debts.

Contact our bankruptcy lawyers to discuss your situation and what to do about student loans in an initial consultation.

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