{"id":1508,"date":"2019-06-14T10:05:20","date_gmt":"2019-06-14T10:05:20","guid":{"rendered":"https:\/\/recoverylawgroup.com\/?p=1508"},"modified":"2021-12-08T04:34:44","modified_gmt":"2021-12-08T04:34:44","slug":"can-educational-loans-be-discharged-in-bankruptcy","status":"publish","type":"post","link":"https:\/\/recoverylawgroup.com\/staging_D\/can-educational-loans-be-discharged-in-bankruptcy\/","title":{"rendered":"Can Educational Loans be Discharged in Bankruptcy?"},"content":{"rendered":"

Bankruptcy is the best legal recourse available to people to get rid of unpaid dues accumulated due to miscalculated financial risks, heavy medical bills or long credit card bills. However, certain debts such as spousal and child support, government taxes and educational loans are not discharged even post-bankruptcy. Getting student loans written off during bankruptcy is extremely difficult, though not impossible, say Dallas based bankruptcy lawyers Recovery Law Group<\/a>. By proving \u201cundue hardship\u201d, which incidentally is very difficult, one can get them cleared, however, the standards set by the court are extremely difficult to meet. According to the court set requirements, a person trying to get education loan discharged off needs to prove that he\/she has endured more hardships than any average person.<\/p>\n

Though it is not necessary that every student loan will be discharged, you can always try if you can qualify for the same. For students who are older, it might be relatively easy to prove \u201cundue hardship\u201d since it is slightly more difficult to find a good paying job as you age; thus paying off debts and living a debt free life might become tricky. However, not all educational debts require the standard of \u201cundue hardship\u201d to be able to get discharged; they can be discharged like most debts post-bankruptcy.<\/p>\n

How to distinguish educational debts which can be discharged without the \u201cundue hardship\u201d standard?<\/strong><\/p>\n

According to the Federal Bankruptcy Court section titled \u201cExceptions to discharge\u201d, subsection 523(a)(8) which describes educational debts that require \u201cundue hardship\u201d for discharge, there are 2 main parts:<\/p>\n

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  1. Loans and overpayments “made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or non-profit institution.” In this, a large portion of all federal and state insured student loans are covered. Any loan funded through non-profit educational institutes is also covered here. To get these loans discharged you need to show \u201cundue hardship\u201d.<\/li>\n
  2. This section deals with those loans which can be discharged without proving \u201cundue hardship\u201d. Here “qualified educational loan[s] as defined in section 221(d)(1) of the Internal Revenue Code . . . .” debts are included.<\/li>\n<\/ol>\n

    Since unless the law states so, a debt cannot be discharged; educational loans which are not government guaranteed or funded by a non-profit and are not a \u201cqualified educational loan\u201d cannot be discharged without proving that you are undergoing \u201cundue hardship\u201d. It is therefore important to know about \u201cqualified educational loan\u201d so that you can discern whether they can be discharged without \u201cundue hardship\u201d or not. Three main types of debts which do not qualify as \u201cqualified educational loan\u201d emphasize on:<\/p>\n