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Eliminate Student Loan Interest in Chapter 13 Bankruptcy

If you’re struggling with student loans, chances are, you’re looking for a way to ease the pressure, and Chapter 13 bankruptcy might just be the solution you’re looking for. Many people assume that student loans cannot be discharged in times of bankruptcy. However, this is not true. With an experienced bankruptcy law firm, things could be made much easier.

This is not to imply in any way that the process of discharging student loans in bankruptcy is easy. The government offers protection for student loans regardless of the lender. However, it may take a lot of work for student loans compared to other types of loans. So, how do you get rid of student loan interest as per chapter 13 bankruptcy?

Chapter 13 Bankruptcy and Student Loans: How It Works

Student loans generally have low-interest rates because the government secures them. Also, no lender has the authority to demand payment for a student loan until the borrower finishes school. Fortunately, you can discharge student loan interest in Chapter 13 bankruptcy.

Under U.S Bankruptcy law, students can get their loans discharged, although not all the time. First of all, you need to understand the discharging student loans can only be achieved by filing Chapter 7 or Chapter 13. In layman’s language, Chapter 13 is a bankruptcy proceeding whereby debtors must follow up with a plan to pay creditors under a court’s supervision.

The debtor must list all the creditors and how much they owe to each of them, his monthly incomes, and expenses. The court will then assign a trustee to meet with the creditors and confirm the validity of the listed debts. Under Chapter 13 protection, the debtor is not in direct contact with the creditor. Instead, he/she pays an agreed-upon amount to the selected trustee, who then distributes this amount to the creditors.

You will also be required to file an adversary proceeding (AP), a form of a lawsuit filed in a bankruptcy court, to ask the court to make a ruling on an issue connected to a bankruptcy case. Some of the issues highlighted include determining whether a particular debt can be discharged or not, revoking confirmation of a plan, and much more. Before filing an adversary proceeding, you need to seek legal advice from an experienced bankruptcy attorney.

Factors Considered When Determining Hardship

One must prove that student loans are causing hardship for the court to grant a discharge. To do so, you may have to sue the lender in court – a process that’s best left to your number one bankruptcy lawyer. You also need to consider the following factors:

  • Hardship persistence – It’s impossible to pay the loan now or in the foreseeable future. In most cases, this happens when the debtor’s capacity to earn is degraded by injury, sickness, or old age.
  • Poverty – Meeting the minimal living standards is everyone’s right. However, if you’re struggling to provide for the basic needs, you cannot repay the loan.
  • You’ve shown solid, genuine efforts in trying to pay the student loan for some time.

Get Legal Assistance!

Getting student loans discharged is a complicated process that requires all the legal help you can get. If you’re struggling with student loans and need help, visit our website at and learn how we can help you!

Arizona Bankruptcy and Debt Solutions
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Mesa AZ 85204

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