Fremont Bankruptcy Attorney discusses Student Loans
Fremont Bankruptcy Attorney discusses Student Loans in Bankruptcy
The current financial crisis has caused unemployment rates to skyrocket all over the country and bankruptcy filings have increased. The national unemployment rate is currently around 8% while California has recently reported unemployment statistics of 10.1%. That means that one in ten people in the state of California is unemployed. It also means that thousands of people with tens of thousands and sometimes even hundreds of thousands dollars in student debt are unemployed.
Under the current Bankruptcy code, educational loans are generally not dischargeable in bankruptcy. Unfortunately these rules apply regardless of whether the debt was acquired directly by the student. This means that parent borrowers are subject to the same standard and cannot obtain bankruptcy relief from the student loans incurred on behalf of their children, even though their bankruptcy proceeding may in all other aspects be completely independent of their children. However, there is a provision in the code under § 523(a)(8) which permits discharge of a student loan where the debt “would impose an undue hardship on the debtor and the debtor’s dependents.” This relief can be obtained by filing a petition with the court for undue hardship. It is ultimately up to the bankruptcy judge in each case to determine whether the debt will be discharged. However, in cases where student loans are crippling a person’s finances it can be well worth the effort.
If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.
