People can file either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 discharges (eliminates) debt. Chapter 13 creates a payment plan to repay debt. To file Chapter 7, filers must pass a “means test” showing they do not have enough income to repay their debt. The bankruptcy reform law tried to discourage this type of filing, but Chapter 7 filings were up by 42 percent in 2009. In July, Chapter 7 accounted for 75 percent of bankruptcy filings. Know that occasionally, student loans are discharged, but it takes a special process to prove undue hardship. The process can be expensive and difficult says California Bankruptcy Attorney Steven C. Peck.
Whatever you do, know that you are not alone. Repaying student loans can be difficult and challenging, particularly if you are among the many unemployed or underemployed Americans. Ultimately, an education can be a valuable investment, but be mindful of the impact large student loans will have on your future budget. If you are burdened with large student loans, remain positive about your opportunities and seek out as much help as you can to eliminate your student loan debt.
Contact the Peck Law Group toll free at 1.866.999.9085 to talk to an experienced California Bankruptcy Attorney and visit us online at thepecklawgroup.com
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