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Are your student loans dischargeable in bankruptcy?

When debts become overwhelming, it can be difficult to see any way out. Phone calls and mail are filled with demands for payment and threats of legal action. Your situation would be demoralizing enough without the constant harassment. While many people delay, at a certain point, your only real solution is to file for bankruptcy protection.

A bankruptcy can enable you to discharge many of your debts, and if you have some that cannot be discharged, like child support payments, the elimination of most of your debts can permit you to begin making those payments.

Student loans are another area of seemingly impossible debts to discharge. For most educational loans, it is necessary to prove that the debt has placed you under an "undue hardship" and that it is not only impossible for you to make the payments today, but for the foreseeable future.

This is a difficult standard, but in today's awful job market, it may be possible to meet the very high bar set by this requirement. If you have student loans, you should speak with a bankruptcy attorney experienced with dealing with these types of loans. While it difficult to discharge many types of student loans, there are some loans that may be easily discharged in bankruptcy.

The availability of bankruptcy discharge depends on the definition of "eligible educational institution" and whether the school you attended is included within this definition from the Bankruptcy Code.

One writer on the subject notes student loans used for "Flight schools, truck driving schools, IT training, coaching, vocational training, mechanic schools, cooking schools, beauty schools" may fall into this dischargeable category.

If you are drowning in debt and had loans from these types of schools, ask your bankruptcy attorney if you may be able to discharge this debt.

Source: The Huffington Post, "Some Private Student Loans Can Be Quickly Eliminated in Bankruptcy," Steve Rhode, July 25 2013

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