Are you not able to pay off a student loan? Are you thinking of bankruptcy as an alternative? If so, you should know that student loans are not to be easily discharged under bankruptcy. The changes made in the Bankruptcy Code of the United States in 1998 made it impossible to write off a student loan under bankruptcy unless the student has enough proof to show extreme hardship. Under such circumstances, a bankruptcy can only help in paying off other debts and leaving the debtor to pay off the student loan through his private means.
It is very difficult to prove in a court of law that you have undue hardship and cannot pay back a student loan. Parameters guiding the court ruling are very strict. To discharge a student loan, one has to prove to the judge and the jury that by paying off the student loan, one cannot keep up minimum standards of living. One also has to prove that this situation will continue for a major part of the loan repayment period and that you did your best to repay a good percentage of the loan before filing bankruptcy. For example, a sixty-year-old man suffering from a grave illness may be able to get off, but not a young person who has the potential to grow and make money.
However, a Chapter 13 bankruptcy can reduce the percentage of your student loans and can stop your creditors from pursuing you during the bankruptcy. But once your credits are discharged, you will have to pay back the remaining portion of your student loans after the bankruptcy.
But bankruptcy need not prevent you from applying for a student loan and getting it approved, provided you qualify certain conditions like a minimum credit score and number of years after bankruptcy set forth by a lender. If you maintain a good credit account for one or two years after bankruptcy and pay your debts regularly, getting a student loan becomes easier.
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