Bankruptcy Will Not Discharge Student Loan Debt; in most circumstances.


Recent college graduates are facing a tough job market in the United States. Unemployment for young people in this country is at 14.5%. Many students graduate with a significant amount of student loans. This leaves many graduates struggling to make ends meet.

Approximately two-thirds of students graduate with student loan debt, and the average debt amount is $24,000. However, around 7,000 students have over $100,000 is student loan debt. Since 2008, over 500,000 students have defaulted on their student loan debt.

Filing for bankruptcy may not completely solve the problem of student loan debt. Student Loans cannot be easily discharged in bankruptcy. It is necessary to initiate a trial within the bankruptcy case called an adversary proceeding to have the judge issue a specific order stating the student loans are discharged. Such a trial can be expensive, with no guarantee that the judge will discharge the student loans at the end of the trial. Success in dealing with student loans outside of a bankruptcy case can vary. The type of student loan can make a difference. Federal loans typically offer more flexible repayment terms than private ones. Private loan terms are often non-negotiable, have variable interest rates and offer no protection for consumers. Many students do not know the difference between federal and private student loans when they sign up for the money.

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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