Students who go to college might end up with very large student loan balances. Making the payment on these student loans can often strain the budget. When you start to add in other bills that some students might have, such as credit card debt or medical bills, things can get overwhelming. Florida residents with student loan debt might be wondering how that debt will be affected in a bankruptcy filing.
Prior to 1976, student loans could be discharged through bankruptcy. Since then, bankruptcy codes have started to make it difficult for people struggling with debt to get rid of student loan debt. When you consider that student loan debt has topped $1.2 trillion and unemployment rates are high, it is easy to see why being able to seek relief from student loan debt might be necessary for some people.
Some people who have student loan debt are able to qualify for forbearance. While that allows the person to stop making payments, it doesn’t stop interest from accumulating. This means that the student loan balance keeps growing.
While it isn’t impossible for student loan debt to be forgiven during a bankruptcy, it is difficult. Some additions to the bankruptcy code don’t allow for student loan debt to be forgiven except for in very specific circumstances. Those circumstances can be difficult to prove.
Anyone who has student loan debt that is making it difficult to live a minimal standard of living might be able to get the loans forgiven. Seeking the advice of someone familiar with how student loans and bankruptcy work might help you to decide if seeking a discharge of this debt is right for you.
Source: Colorado Springs Independent, “Student loans rob the future to pay today with wide-ranging consequences” Griffin Swartzell, May. 07, 2014