When Should I File For Bankruptcy If I Want To Have My Student Loans Discharged?

Is now the best time to file for bankruptcy if you have student loan debt that you want to have discharged? Many borrowers are asking themselves this question, especially those who are waiting to hear the decision from the U.S. Supreme Court about student loan debt cancellation. How can you determine whether you should wait to file, or whether you should move forward with your bankruptcy case as soon as possible? The best way to make this decision is to speak with a West Palm Beach bankruptcy attorney about your circumstances. In the meantime, you can consider some of the following questions that can help to guide you as you think through your options.

Am I Ready to File for Bankruptcy? 

The first thing to consider is whether you are ready to file for bankruptcy. This is a question that you should answer with help from your attorney, but in short, you should think about your eligibility for bankruptcy and whether your student loans are likely to be discharged if you do file.

Do I Understand How the New Process Will Work for Discharging Student Loans in Bankruptcy? 

As you might already be aware, the U.S. Department of Justice has new guidance for the process of discharging student loan debt in bankruptcy. Do you understand what the new guidance is likely to mean for you? In short, the new guidance does not involve changing the legal requirement that a student loan borrower prove an “undue hardship” to have their student loan debt discharged. What the new guidance does do, however, is streamline the process of proving the undue hardship requirement, thereby making it easier for debtors to show that they are eligible for a discharge. Thus, you will want to talk with an attorney to determine whether you are likely to meet the “undue hardship” requirement. If so, filing for bankruptcy on the sooner side could be the right decision for you.

Do I Have More Student Loan Debt Than the Cancellation Plan Would Allow? 

One thing to consider is the possibility of student loan debt cancellation, which is currently on hold pending the U.S. Supreme Court’s decision on the matter. If your student loan debt would be entirely wiped out by the debt cancellation — that is, if you owe less than $20,000 or $10,000 depending upon your eligibility for cancellation —it might make sense to wait until the Supreme Court issues its decision. However, if the cancellation policy would not eradicate most of your student loan debt anyhow, you should discuss the possibility of bankruptcy with a lawyer sooner rather than later.

Contact a West Palm Beach Bankruptcy Lawyer 

If you are seeking to have your student loans discharged in bankruptcy, you are likely wondering if there is a specific point in time that you should file. In other words, you may be wondering whether you should be waiting to file for bankruptcy until a particular moment, or whether you should be filing immediately. Our experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller are here to assist you, and we can answer any questions you have about student loan discharges in bankruptcy today. Do not hesitate to get in touch with us to learn more about how we can assist you.

Source:

justice.gov/civil/page/file/1552681/download