The matter of student loans is sort of vulnerable subject, considering that it’s more likely for you to wipe out gambling debts via bankruptcy law process than to discharge student loans. There are ongoing debates on why is it so. Meanwhile, it is not such a mission impossible to win that case in spite of current policy in most courts.
If you face the situation when the debts accumulated during your education are drowning you and you no longer have any legal ways of paying the creditors off, file bankruptcy. This is the first step, though filing bankruptcy in usual manner won’t automatically impose to the court to consider discharge of your student loans. In order to do this, additional phase is required.
This phase includes filing a separate lawsuit, so called adversary proceeding.
Further on, the court will estimate whether your situation qualifies for discharge. The only way to present student loans as the debts that should be discharged it to prove undue hardship. Proving undue hardship consists of passing Brunner test.
Brunner test imposes three criteria you must meet. The first one is poverty and it implies that your financial situation, based on your current income and expenses, will not provide you with a minimal living standard if you continue to repay the loans. Persistence is the second standard.
You have to prove that critical financial situation will persist for a long time. The third thing you need to prove is that you have made a good faith effort to repay the money you owe.
If you succeed convincing the court that your student loans should be discharged, you will be unburdened.
If you fail, as in most of the cases, you can try to file bankruptcy under chapter 13. If you file under chapter seven, student loans will be treated as nondischargable debts and you will still have to pay them back after bankruptcy period expires. Chapter 13 provides possibility of setting a repayment play or even reducing total amount of debts, while protecting you from the creditors during repayment period. Consulting some good lawyer prior filing bankruptcy is strongly encouraged. Your first choice should be chicago best bankruptcy attorneys.
According to current bankruptcy laws, anyone planning to file bankruptcy is obligated to attend credit counseling. Credit counseling is a pre-bankruptcy step always taking place before you file a petition.
Credit counseling is provided by the approved credit counseling agencies. It lasts approximately one hour and you can complete it in person, over the phone or online. The purpose of the credit counseling is to answers whether you should file bankruptcy or some alternatives could be useful solution for your financial problems. During the procedure, provider of the counseling will evaluate your finances, incomes, expenses and debts and estimates if you could perhaps pay your debts off through the repayment plan, out of court settling or via any other way.
Credit counseling costs, the price varies, but the fees have to be discussed with the client prior the meeting. If fees turn out to be too high for you, the agency can reduce the amount or offer the counseling for free. Once the counseling is completed, licensed agency provides you with the certificate which you must submit to the court in order to prove that you attended and completed the counseling.
Very often the whole session comes down to confirming that bankruptcy is your only way out of financial troubles. However, if you fail to complete the counseling successfully, the court will most probably dismiss your case and you’ll end up with the same debts hanging over your head. These requirements usually refer to the individuals filing bankruptcy under chapters 7 and 13. The credit counseling needs to take a place at least 180 day before you file bankruptcy. If you want to know more about this you should contact dallas bankruptcy attorneys.
There is very specific and limited list of situations when you can be excepted from credit counseling (such as physical or mental disability that prevents you from attending, military duties, a proof that you need to file bankruptcy immediately…), but these occasions are extremely rare.
There are, also, approved credit counseling agencies providing debt assistance programs meant to help people overcome their tough financial period, whether they plan to file bankruptcy or not. Either way, if you have a feeling that your debts are getting out of control, taking these courses could be helpful.
Bankruptcy law imposes quite strict procedures of filing and completing bankruptcy. There are several specified phases of the process and you are obligated to complete the all successfully.
When filing bankruptcy under the chapters 7 or 13, there is a step after filing and before you are allowed to get discharge of your debts. It is the debtor educational course.
Bankruptcy law foresees not only discarding of a person’s debts, but also a slate clean and a chance for a brand new start for the debtor. In order to achieve these aims, the court mandates debtor educational course. Similar to the credit counseling, a step performed before filing bankruptcy, the educational course lasts for few hours, and it is performed by a licensed agency, in person, over the phone or on the internet. It is required to complete this course within 60 days of the date when meeting with creditors is appointed (if the debtor filed under the chapter 7) or prior to last payment in repaying plan (if the debtor filed under the chapter 13).
Once the course is completed, the agency provides the certificate, proving that the debtor attended the course and got all necessary information and guides on how to manage his future incomes, bills, credits and generally speaking – how to use all the advantages of the discharged debts. The debtor must submit the certificate to the court in order to get the discharge.
Every agency has its fees for this course and they vary, but most agencies are willing to waive it, if the debtor cannot afford to pay the fee.
The course provider will equip the debtor with money management skills and those will be used right after the bankruptcy is completed, since the debtor will have to manage his incomes and expenses on his own in the after-bankruptcy life. We learn a lot from wrongful death attorney pasadena.