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Can student loans be discharged through personal bankruptcy?

The student loan industry is massive, and as a result, many Texans find themselves graduating or leaving higher education programs with an enormous amount of debt. With job prospects uncertain for many of these individuals, making their student loan payments can become challenging, even downright impossible. When this happens, an individual may wonder if he or she can turn to bankruptcy to help alleviate this debt burden.

Although it is technically possible to shed student loan debt through personal bankruptcy, the truth of the matter is that it is extremely difficult. In order to rid one's self of student loans through bankruptcy, he or she must show that the loans place a severe hardship upon him or her. How is "severe hardship" defined? That's a good question. Although the answer is far from clear, the courts do tend to look at a number of factors when deciding whether severe hardship exists. Amongst these factors are an individual's age, income, expenses, health, and the projected longevity of any income problems.

So, a Texan who believes he or she is facing severe hardship on account of their student loans can certainly try to alleviate them by filing for bankruptcy, but they may also want to consider their other options. There are a number of student loan repayment plans, including many that are tied to an individual's income. Personal bankruptcy may still be an option, too, if financial difficulties are caused not only by student loans, but also medical debt and credit card debt.

Every case of overwhelming debt is unique, which means that each one requires an individualized approach. This is why Texans who are struggling with overwhelming debt shouldn't rush to major decisions based on information they find on the Internet. Instead, it might be wise for them to sit down with an attorney who knows all of the ways that a person can find the debt relief they need.

Source: FindLaw, "Your Options When You Can't Repay Student Loans," accessed on April 8, 2017

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