Bankruptcy and Student Loans in New Jersey
– Bankruptcy and Student Loans in New Jersey – Law Office of Edward Hanratty
Information: Bankruptcy Law – New Jersey – 732-866-6655
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the Student Loan on a chalkboard
Meta Description: If you are suffering from severe student loan debt, contact an attorney who has a comprehensive knowledge of both bankruptcy and student loans in New Jersey
Bankruptcy and Student Loans in New Jersey
Student loans can impose serious financial hardship on Americans of every
age. From taking out tens of thousands of dollars to cover tuition, to
interest, to late fees, the student loan crisis continues to grow. However, similar
to credit card debt and private loans, there are circumstances in which student
loan debt can be fully or partially discharged through the bankruptcy process, if
you follow the proper procedure. For many people, bankruptcy and student loans
in New Jersey can have a significant impact on one another. If you are unable
to pay back your student loans, bankruptcy may be a viable option for you.
Contact the Law Office of Edward Hanratty at 732-866-6655 to speak with an
experienced bankruptcy attorney and learn if you have the ability to discharge
your student loans.
Bankruptcy is a formal legal proceeding available in the United States that
allows people in serious debt to either have their debt discharged (eliminated)
or repay their creditors. Bankruptcy is a legal option for those looking for a
financial fresh start.
There are advantages and disadvantages to declaring bankruptcy, and it is
not right for everyone. The main advantage of declaring bankruptcy is that it
gives debtors options to start fresh with either a clean slate, or a repayment
plan (depending on what type of bankruptcy a debtor chooses). The disadvantage, however, is that bankruptcy
can severely harm the debtor’s credit score, making it very difficult for them
to get approved for credit cards, receive loans, rent property, or secure
mortgages for a period of time moving forward.
Student Loans Be Discharged in Bankruptcy?
For many years, people operated under the assumption that student loan
debt was impossible to discharge during the bankruptcy process. Many of those
who carry student loans believe that declaring bankruptcy would not help them with
their student loan debt. This assumption prevented many people from pursuing
bankruptcy when it may have been the most viable option for them to financially
recover. In fact, student loan debts can be wiped completely away in certain
circumstances. It is important to note that there are specific circumstances in
which student loans are allowed to be discharged within a bankruptcy and
visiting with an experienced bankruptcy attorney familiar with this process at Law
Office of Edward Hanretty can help answer your questions about your specific
or 13 Bankruptcy
There are circumstances in which student loans can be discharged in
either a Chapter 7 or Chapter 13 bankruptcy. There are significant differences
between the two, and you should consider discussing your situation with an experienced
New Jersey bankruptcy attorney to determine which form of bankruptcy would be
right for you, if any.
Chapter 7 bankruptcy is
more appropriate for people who do not have the means to pay back their loans or
debts at all. In a Chapter 7 proceeding, the debtor’s non-exempt assets are
liquidated, and a trustee pays the creditors with any remaining assets from the
debtor. After these payments are disbursed, the debtor’s debts are discharged.
In a Chapter 13 bankruptcy, on the other hand, the debtor must pay back the
debtors over a reasonable period of time according to a repayment plan approved
by the bankruptcy court.
Loan Cancellation Automatic?
No. In addition to declaring bankruptcy and fulfilling all of the legal
requirements to complete the process, you must complete an additional step to
seek cancellation of outstanding student loans.
The process of cancelling student loans can be a legally challenging and
complex option for debtors. There are specific questions that must be asked,
and answered, in a certain way in order for the student loan cancellation
process through bankruptcy to occur. Visiting with an experienced bankruptcy
attorney can help you determine if you qualify to have you student loan debts
Options Are Available?
The outcome of the adversary proceeding regarding student debt
cancellation in a bankruptcy can either be a full or partial discharge of the
debt, or the court may decide not to discharge the debt at all. If a debtor is
unable to have their student loans discharged, they may still be able to
construct a new repayment plan with their student loan servicer
If you are unsure about declaring bankruptcy and believe you may have the
ability to repay your student loan debt on a different type of payment
schedule, you have other options. According to the Federal Student Aid website, other repayment plans include
the Graduated Repayment Plan, the Extended Repayment Plan, and the Pay As You
Earn Repayment Plan, which fixes your monthly payment as a proportion of your
income. Though this does not remove the stress of having a huge amount of debt
looming over you, it can at least lower your monthly payment to allow you
additional income to pay your living expenses.
How Likely Am
I to Have Student Loan Debt Discharged?
Despite the strange phenomenon of debtors giving up on trying to
eliminate student debt, there is a relatively high success rate. According to a
study from the University of Iowa suggests that people who pursue an adversary proceeding to relieve
student debt are successful nearly half of the time. Success is especially
likely if you have a very low monthly income or some persistent medical
condition. Visiting with an experienced student loan debt discharge
attorney can help you understand your legal rights.
Contact an Experienced
New Jersey Attorney Who Knows Bankruptcy and Student Loans
One of the most persistent reasons people do not get their student loan
debts discharged through bankruptcy is they do not know that they have this
option available to them. Our office has seen how full or partial discharge of
student loan debt can be like starting a new life for our clients. That
stressor that has been hanging over you since college can be wiped away, and
hope for your future can be restored. At the Law Office of Edward Hanratty, we
understand the interrelationship between bankruptcy and student loans, and we
do everything we can to help our clients regain their financial independence.
Call us today at 732-866-6655 to schedule a consultation.