Students all over the country are having trouble bearing the weight of their student loans but the probable may be even worse in California. Consider that the average student loan per capita is $4,160. In fact, we are among the top 20 states with the most student loan debt. In California it averages $22,191 for a four-year degree.
But is there anything that can be done about this? Learn more about bankruptcy options and you’ll find out exactly what your unique options are. Read on and then contact The Law Offices of Paul Y. Lee at 951-755-1000 for a free bankruptcy consultation.
What is Chapter 7 Bankruptcy?
First of all, let’s cover what Chapter 7 bankruptcy is. Bankruptcy itself is a legal process that allows married couples, single people, and even business owners, pay off, reduce or altogether eliminate their debts – it all depends on their financial ability to pay it back.
In most cases, people in California who file use Chapter 7. It can also be referred to as “ordinary” or straight” bankruptcy. To see how prevalent it is, consider that last year in Sacramento there were 8,500 bankruptcy filings. Of those, upwards of 6,300 were Chapter 7. Put another way: About three out of four people who declare bankruptcy will choose Chapter 7.
With Chapter 7, you are basically able to wipe away a number of debts. Only certain debts can be erased. Those that qualify are referred to as “dischargeable debts.” The most common examples are credit card and medical bills. In most cases, student loans are not dischargeable which means they can’t be erased in a bankruptcy. That said, there are exceptions that may apply to your loans.
Situations in which you may be able to discharge student loans
If you can show that your student loans are causing you excessive financial hardship then it’s possible the courts could agree to discharge the debt. You must meet specific standers under what’s known as the “Brunner Test.” In order to pass this test and have your student loans considered for discharge, you must be able to prove all of the following:
- Your student loan repayment is keeping you from a minimum standard of living for you and your dependents (if applicable).
- You have made good faith efforts to pay back your student loans.
- It’s unlikely that your current economic situation is going to change significantly.
Find out what your options are
Never assume that you’re stuck with any type of debt – no matter what you may have heard or read. An experienced bankruptcy attorney can tell you what your options are – but only after they’ve looked closely at your specific situation.
To find out what you may be eligible to discharge, contact The Law Offices of Paul Y. Lee at 951-755-1000 today. We offer a free bankruptcy evaluation. We’ll learn a few things about your financial situation and then offer our advice on what your best options are. Today is the day to take your future into your own hands. Stop the worry and stop the creditor’s calls: Call us today!
