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Many of us attend college over the years and what you’re going to find out over the long run is that your loans are going to add up fairly fast. The average student loan debt today is around $23,000 for 4 year students. This is a lot of money for just about anyone.
What you’re also going to find out is that you can almost double this number if you’re going to be staying on campus. It’s no wonder why people have to work for years just to pay off their student loans!
When students find themselves on hard times, they find themselves thinking about bankruptcy. What many don’t realize is that 99% of the time, your student loans are going to be protected from bankruptcy. This type of bill is going to be with you forever.
The history of this law
Back in 1998, the bankruptcy laws changed significantly. With this new law in effect, people had soon found out that it was awfully hard to remove a student loan. To make it fair, people protested that with something like a car, you can take that away, but with an education, you can’t just take all that knowledge from your brain.
In order to make it fair for colleges, as well as banks that lend out money, the government had stated that once you get a student loan, it’s going to be next to impossible to discharge it.
Is there any way to get rid of it?
As I already mentioned, you’re going to find that 99% of the time, you’re not going to get away with. If you’re planning on preparing for bankruptcy, you’re going to want to have that thought in the back of your head that this is going to be sticking with you until it’s paid off.
There are some steps you can take to get rid of it. Generally, if you meet the following guidelines, you may be able to get rid of it 100%.
- You can’t maintain your standard way of living. If the loans take a big chunk of your budget and you can prove it, the judge may grant hardship.
- You can prove that it is going to continue for years to come.
- You have been paying for 5+ years. If you have shown that you have paid in the past and you’re making an effort, this is another step.
Again, you will have to meet all of these 3 guidelines to be considered. You won’t be able to fake it, so don’t even bother.
If you do find that you’re able to bail on your student loans, you will never be able to receive one again in the future. If you decide that you want to go back to school, you may find yourself funding it yourself, rather than getting a loan.