Common Types of Student Loan Discharge in Minneapolis

Student loan debt can follow a person for years. Many people continue making payments when they are struggling to cover basic living expenses, even in situations where they would normally file for relief through the bankruptcy courts.

It is a common misconception that student loans can never be discharged in bankruptcy, but this is not always the case. Our dedicated student loan discharge attorneys can answer your questions about the common types of student loan discharge in Minneapolis. Reach out to us today to get started.

Are Student Loans Usually Dischargeable in Bankruptcy?

Most student loans are treated differently from other debts during bankruptcy. In a typical Chapter 7 or Chapter 13 case, credit card balances, medical bills, personal loans, and many other unsecured debts may be discharged as long as you complete all of the requirements set out in the code. Discharging student loans requires more steps and is not always an option.

Most of the time, you will need to show the bankruptcy court that repaying the loans would create an undue hardship. This is a high standard to meet, and many people will not qualify if they are able to cover their basic living expenses.

This does not mean discharge is impossible. It simply means the court will take a closer look at the person’s financial circumstances before deciding whether the debt should be eliminated. Our Minneapolis attorneys can explain the common forms of student loan discharge and how they may apply to your case during your initial consultation.

When Can You Discharge a Student Loan?

A bankruptcy court may discharge student loans when repayment would create an undue hardship. Our Minneapolis attorneys can help you understand the common ways to discharge student loans and what they might mean for you.

Permanent or Long-Term Financial Hardship

Some people face financial challenges that are unlikely to improve in the foreseeable future. A serious medical condition or other challenge may limit your ability to earn enough income to repay student loans while maintaining a reasonable standard of living.

Limited Income Despite Good-Faith Efforts

Many borrowers work hard, make payments when possible, and explore available repayment options. Despite those efforts, their income may still be insufficient to keep up with student loan obligations. The courts are looking for a good-faith effort toward paying back these debts.

Adversary Proceedings in Bankruptcy

Seeking a student loan discharge usually requires an adversary proceeding, which is a separate legal action filed within the bankruptcy case. Think of it as a lawsuit that occurs under the larger bankruptcy process. The borrower files paperwork asking the court to determine whether the student loans should be discharged. The loan servicer or lender then has an opportunity to respond. Both sides may present evidence and argue for or against the discharge of the debt.

Adversary proceedings stand out during the bankruptcy process, as they can be contentious. While there is often a sense of collaboration in bankruptcy, these cases are closer to the traditional litigation you might find in courts across the country. While every case is different, lenders typically argue against the discharge of a student loan. While the process may sound intimidating, our firm can guide you through each step. Having the support of experienced legal counsel in Minneapolis increases your chances of success in pursuing the common types of student loan discharge.

Contact a Minneapolis Lawyer About Common Ways To Discharge Student Loans

If you are unsure about your rights or have questions about the common types of student loan discharge in Minneapolis, our team of attorneys is here to help. We know how overwhelming it can be to live with serious debt, especially when it feels like even bankruptcy cannot help you overcome it. The good news is that our firm is here to help you discharge these obligations and get the fresh start you need. Contact us today to discuss your situation during a free initial consultation.