- Free Consultation: (202) 448-5136 Tap Here To Call Us
Can Student Loans in DC Be Discharged Through Bankruptcy?
Today, one of the biggest debt problems that many people face is student loan debt. According to American Student Assistance, around 60 percent of college students — or 12 million college students each year — borrow money to cover the costs of attending school. Washington, D.C. has the most student debt in the nation. So can student loans in DC be discharged through bankruptcy?
The class of 2015 was the most indebted in U.S. history. Since then, student debt has only grown and has now passed credit card debt. Multi-thousand dollar student loan debt can be a problem for anyone. But for those who are unable to find jobs, student loan payments can seem insurmountable. For those with financial or physical struggles, repayment may seem impossible. Unfortunately, under current bankruptcy laws, you cannot discharge student loans in DC in a bankruptcy.
Chapter 7 bankruptcy and student loans in DC
Student loans are treated differently under the law than the vast majority of other kinds of debt. Student loan debts are unsecured, meaning there is no collateral to guarantee them. The bankruptcy code gives student loans a special protected status. Generally speaking, you cannot discharge student loans in bankruptcy. Student loan balances, moreover, typically cannot be reduced in a bankruptcy filing.
Lawmakers have tried, without success, to make changes to the bankruptcy code. In the meantime, fears of a student debt crisis continue to mount. Student borrowers crippled with debt are denied the relief that other debtors can find in the bankruptcy code.
The hardship discharge and student loan debt
So bankruptcy is typically not a viable means of resolving student loan debts. Extremely uncommon exceptions to the general rule do exist. In some cases, for example, if a debtor can prove that repayment would be an undue burden, it may be possible for debt to be discharged.
Proving this goes far beyond just showing you cannot get a job or cannot pay. Typically, you need to demonstrate extreme hardship, such as permanently disability and even a certainty of hopelessness. For this reason, hardship discharges are rare.
If you believe you meet this stringent standard, consult with an experienced bankruptcy attorney.
Chapter 13, perhaps, but not Chapter 7
In most cases, a Chapter 7 bankruptcy will not eliminate student loan debt in DC. But it can help you to eliminate or renegotiate other debts so your student loan debts become more affordable to pay. On the other hand, a Chapter 13 bankruptcy can help you restructure your debt in a single repayment program for all of your creditors — including student loan lenders. If you have significant amounts of other debt that are affecting your finances, consulting with a bankruptcy lawyer to explore your options would be a smart choice.
They Called. They're Glad They Did.
Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
