Prior to the legislation changes in 1998, student borrowers could potentially discharge student loans if they had been in repayment for seven years, notwithstanding the undue hardship test. Today, student loan debt in bankruptcy is a bit more complex and requires an understanding of the Brunner Test.
As you can imagine, many student loan debtors are unable to pass the Brunner Test in order to get student loans discharged (especially in a chapter 13 bankruptcy case). The new student loan management (SLM) program doesn’t overrule this precedent—which would make discharges easier—but it is instead designed to help provide more repayment options to bankruptcy debtors.
When filing for bankruptcy, it is vital to protect yourself from bill collectors. As soon as you file, an immediate court order called the automatic stay goes into effect. This stops most civil lawsuits and collection actions against your property by a creditor. There are certain situations where an automatic stay may be able to help, such as foreclosure or having wages garnished.
Filing bankruptcy is a powerful tool you can use to get free of debt and give yourself a fresh financial start. Part of this is the opportunity to repair your credit going forward. While your credit will take an initial hit right after filing, there are many ways to restore it. Bankruptcy stays on your record for 10 years in most cases. If you don’t take action to increase your credit score during this time, you might find it difficult to lease an apartment or buy a car. It is important that you move as soon as possible to start restoring your credit after you file bankruptcy.
Far too many Americans find themselves in a financial crisis because of soaring medical costs. All it takes is one trip to the emergency room or a bad diagnosis for things to spiral out of control. But there are options. Will your medical debt be eliminated if you declare bankruptcy? Learn more about filing bankruptcy and what it means when it comes to medical debt.
Sadly, nearly 1.7 million American households have experienced bankruptcy due to mounting medical expenses. This type of debt creates major stress and has become a fairly common reason to declare bankruptcy.
Medical debt is considered an unsecured debt when you file bankruptcy. This means it’s treated similarly to your credit card and other unsecured debts and will be discharged once your bankruptcy is finalized. Since it is unsecured, you don’t stand to lose your home or any other assets when you file bankruptcy.