For many people, student loan debt is one of the most significant — and stressful — types of debt they carry. You can potentially get approved for student loans worth hundreds of thousands of dollars with no collateral and no meaningful way to pay it back. This can leave you owing money on loans that are too much for you to pay back, even when you secure a job after graduation. If you are in such a situation in Florida, you might be considering Chapter 7 bankruptcy as a solution. But can student loans be discharged in Chapter 7 bankruptcy?
As a bankruptcy lawyer, I’ve encountered many clients overwhelmed with student loan debt. The good news is that resolving this debt is possible with the right strategies. Take a closer look at Chapter 7 bankruptcy and how it affects student loan debt in Florida.
Student Loans and Chapter 7 Bankruptcy
When you file for Chapter 7 bankruptcy in Florida, you are telling the court that your finances are in a state where you couldn’t possibly pay off your debts in any reasonable time, if ever.
Unfortunately, under Florida law, student loans typically are one type of debt that can’t be discharged in this manner. The only way to discharge student loans with Chapter 7 bankruptcy is to convince the court that repaying your loans would result in undue hardship. This is done by filing a lawsuit inside the bankruptcy against your student loan lender.
To determine whether repaying your loans would result in undue hardship, the courts apply the Brunner test, established in Brunner v. New York State Higher Education Services Corporation.
According to Florida law, student loan debt cannot be discharged under normal circumstances in Chapter 7 bankruptcy. It can be discharged only if you can prove it is an undue hardship.
Understanding the Brunner Test
The Brunner Test is a three-part test that asks the following questions:
- Will you or your dependents be unable to maintain a minimal standard of living if you are forced to repay the loans?
- Are there any exceptional circumstances that suggest that this inability to repay will persist throughout the repayment period for the loan?
- Have you made good-faith efforts to repay whatever portions of the loans you can afford to pay?
Judges apply this test when determining whether your student loans qualify as an undue hardship. If you successfully prove that your loans fall under undue hardship, your student loans will be discharged along with any other debts discharged. However, if you can’t meet these standards, those loans will remain after your Chapter 7 bankruptcy is complete.
Do you have mounting bills due to student loans? Chapter 7 bankruptcy may offer a way forward. Contact my law firm today at (407) 749-0080 to discuss your options for resolving student loan debt.
Alternatives to Bankruptcy for Student Loan Relief
Bankruptcy isn’t the only option for escaping student loan debt. The federal government also offers student loan forgiveness options for people who qualify. You can research whether you qualify on their website or discuss these options with me during your consultation. While I am a bankruptcy attorney, I leverage whatever options are available to help my clients recover from student loan debt. You may also be eligible for other forms of debt consolidation outside the bankruptcy process that can make paying off your student loans easier.
The Pros and Cons of Chapter 7 for Student Loans in Florida
Perhaps the most notable advantage of Chapter 7 bankruptcy is that your creditors are issued an automatic stay when you file for it. This means that you are protected from creditors trying to get money from you during the time it takes to argue your case before a bankruptcy court.
For many people, a few months of not being hounded by debt collectors can be as important as having debts discharged. There is also a chance that your student loans will be discharged. However, even if they are not discharged, many of your other debts will be. This means that you will have more money available to put toward paying off student loans.
Of course, the biggest disadvantage is that your student loan debts may not be discharged. Discharging a few thousand dollars of debt may not be worthwhile when you still have tens or hundreds of thousands of dollars of debt remaining. This can be particularly frustrating because Chapter 7 bankruptcy can impact your credit rating.
A Florida Bankruptcy Lawyer Can Help You Make an Informed Decision
Making an informed decision is a key part of escaping student loan debt.
I have spent my entire career helping clients make informed decisions. A crucial part of my job is examining clients’ finances and helping them understand what bankruptcy will cost them and what they will gain from it. When you consult with me, I can provide you with a detailed picture of what to expect throughout the bankruptcy process. I want you to have clear expectations for both the near future and decades from now. By keeping both your present and future needs in mind, we can choose the best path for your unique circumstances.
Contact Lewis Roberts, PA for Help with Bankruptcy in Florida Today
Are you facing student loan debt you can’t pay in Florida? With the right strategies, you can successfully resolve this debt and move forward with your life. As a bankruptcy attorney, I am dedicated to safeguarding my clients’ futures, and I can help you navigate yours.
Ready to take the next step to recover from student loan debt? Don’t wait. Contact my law firm at (407) 749-0080 as soon as possible to discuss your case with an experienced bankruptcy attorney.
Attorney Lewis Roberts
The weight of debts that one cannot pay carries financial stress into every waking moment. It is time for this to end. Lewis Roberts, PA, offers solutions to relieve these worries. With over 20 years of experience in helping individuals overcome the burden of debt, bankruptcy attorney Lewis Roberts presents a range of options tailored to each unique situation. Clients can trust his advice on any matter related to debts, as he identifies appropriate options and explains the paths to debt relief clearly and carefully. This ensures that clients make the best decisions for their future. [ Attorney Bio ]
