I can't pay off student loans because my Women's Studies degree is useless. Do I qualify for Chapter 7 or undue burden?
Chapter 13 Bankruptcy Attorney
Whether you qualify for a Ch7 depends on a variety of factors including household size, expenses and income among others. Unfortunately, it is likely that you will not qualify to discharge your student loans if you are able to work at all. It is very difficult to qualify as falling under an undue hardship if you are able to hold any sort of job. However, I'd be happy to speak with you in more detail about your situation, give me a call.
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The fact that your degree is useless is only a marginal factor, at best, in determining whether you can discharge student loan debt in bankruptcy. The analysis is still mainly financial and you must prove, AT TRIAL, that you are unlikely to ever make enough money to pay your student loan obligation and maintain a necessary standard of living. The analysis is complex and even the BEST cases are 50/50. The main part of my practice is student loan discharge and resolution. If I am representing a student borrower (as opposed to a cosigner), my general rule of thumb is the borrower must be out of school for about 8-10 years before even attempting the discharge case (unless there is an obvious physical or mental disability).
The other factor is whether you have federal student loans or private student loans. If you have mostly federal loans, you can forget about a discharge. You will just have to go on income based repayment and live with it. If you have a good portion of private student loans, then discharge becomes a possibility, but settlement is usually the easier road.
Lastly, there is a the cost benefit of the discharge action. The attorney fee for a student loan discharge is 5 figures and you will spend that regardless if you win or lose.
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Chapter 7 Bankruptcy Attorney
Check to see if your debt is truly student loans. If what you owe is actually just tuition that the school fronted to you, it might not be a loan. You need to have actually signed off that the debt is a student loan in order for them to declare it is student loan debt. I have forced schools to write off debt because it was never set forth on paper as student loan debt. This is important since student loans cannot be discharged in a bankruptcy even if you otherwise qualify for a ch 7 bankruptcy. Asking a judge for permission to write off a student loan is very difficult. On a related note, if you have not paid your student loan debt for a long time, and it is delinquent, you might be able to cut a deal. I once settled a $33,000 student loan debt for a $10,000 lump sum payment for a client.
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First, most bankruptcy attorneys have NEVER filed and litigated a student loan case!. I have practiced over 26 years and filed over 42 student loan adversary actions and won 5 of 6 appeals on student loans and one case is now before the 9th Circuit. I would be glad if you emailed me to send you the results of those cases which involve wins, losses, and settlements. Attorney Berkus in Denver is the closest answer here on point. You should ONLY speak to an attorney in your state who has argued those before YOUR judges and can advise you accordingly. I STRONGLY disagree with the comment that because you are working you will lose..NOT TRUE. That would appear to be a statement from an attorney who has NOT argued or read those cases. EVERY case printed in the Bankruptcy Reporter I see and review. Sometimes the private ones are easier and sometimes not..depending on who the creditor is. I argue federal student loan cases all the time too. It is true you should check out the William D. Ford program on federal loans but I strongly urge you NOT to join until you talk to a good attorney as there are reasons to join..and reasons not to so you don't wreck your case..and reasons to join later. And you need to understand how it works..Other 10 yr options to wipe off the student loan debt for Public Service jobs may be available and are in some cases you probably do not know about. Your list of monthly expenses are important as they will be an exhibit at trial so you do NOT want to file w/o speaking to a good bankruptcy attorney who has actually litigated them. How do you find them? call around and ask the old time attorneys where you live..and call the judges clerk and just ask them: Do you know student loan attorneys who have argued those cases. The Federal attorneys who have litigated against the student loan Plaintiff attorney may tell you also who they believe is good. Each of the 3 prongs is important. However, in light of everything above. this is the most important: WAIT IF YOU CAN AND WATCH THESE NEXT 6 MONTHS TO SEE IF THE BANKRUPTCY STUDENT LOAN LAWS CHANGE..OR MAYBE FOR PRIVATE BUT NOT FEDERAL OR WHO KNOWS..GOOGLE IT...DISCUSSION IS BECOMING A POSSIBLE REALITY AND WAS JUST ON YESTERDAYS NEWS TOO. I hope all the above helps as the letter I give my clients on student loans is 8 pages long single spaced and thus beyond the scope of this reply. Sincerely, Richard D. Granvold Washington State Bankruptcy Attorney.
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