Can I Have Debts Discharged Because of “Undue Hardship?”
There are certain debts that cannot be discharged, even in a Chapter 7 bankruptcy. These debts include child support, alimony, most taxes, criminal debts, and student loans. However, there is a very tight exception called, “undue hardship,” that may allow normally non-dischargeable debts to be discharged.
Undue Hardship: The Four Prong Test
There is a slim chance that you may be able to have student loans discharged if you meet all of the “undue hardship” conditions. This “undue hardship” rule exists to help debtors in extreme circumstances.
It’s a four prong test; you must show:
- You are unable to pay remaining student debt and maintain the basic standards of living due to your income and family situation;
- The financial strife will continue for at least the length of your student loan scheduled payments;
- That either you or a loved one that you take care of has a disability, preventing you from working; and,
- Prior to this disability, you have a strong record of good faith payments.
What if my undue hardship petition is denied?
If the bankruptcy court denies your undue hardship petition, your bankruptcy attorney will help you eliminate all dischargeable debts so that you have the cleanest slate possible, a fresh start. Most unsecured debts are indeed discharged in a Chapter 7 bankruptcy so that you can use your income, no matter how small, for food, clothing, shelter, and medical care.
How do I stop creditor phone calls?
One of the most stressful parts of being in debt is the creditor phone calls, letters, foreclosures, wage garnishments, and lawsuits. The good news is that as soon as you hire a bankruptcy attorney and provide all the necessary information, he or she will file your bankruptcy petition. The moment it’s accepted, the court issues a “stay” and all collections must stop immediately. This means that the creditor phone calls and all other attempts to collect will cease.
Where do I get help filing an undue hardship petition?
Bankruptcy and undue hardship petitions involve a very specialized area of law; be sure your attorney focuses his or her practice on bankruptcy. We do focus our practice on bankruptcy law and, everyday, help people just like you. You can reach us at 513-793-6555 or Thomasjr@geygan.com.
We will gently walk you through the bankruptcy process, answer your questions, analyze your case, and aggressively fight for your legal rights. We look forward to your call or email.
