Bankruptcy and Student Loan Debt

Most people do not realize that student loans are not dischargeable under Chapter 7 or Chapter 13 bankruptcy.  Only unsecured debt, like credit card debt, is dischargeable. Student loans are considered a secured debt, which means that even if people file for consumer bankruptcy, they will still be responsible for paying back educational loans.

The only way people may be able to avoid paying their student loans under bankruptcy is by proving the loans present an undue hardship, which is quite difficult to accomplish.  In order to prove undue hardship, people will have to file a lawsuit with their bankruptcy proceedings and present evidence to a bankruptcy judge that paying their student loans would be a substantial financial burden. Should people plan to take this route, they will definitely need assistance from a skilled bankruptcy lawyer.

If you have questions about how filing for bankruptcy in Utah will impact the debt accumulated by your student loans, contact the Stone Law Firm and set up a consultation with a Salt Lake City bankruptcy lawyer.