Bankruptcy And College Loans
| A person files for bankruptcy only when he/she is not in a position to repay his/her loan in any way. Filing bankruptcy can be a terrible experience in an individual’s life. And if this happens in a student’s life, it can lead to miserable consequences. |
Sponsored Links :
|
However, under the existing legal guidelines that are listed in the Federal Student Aid Ombudsman (FSAO), it is really difficult to discharge or get rid of federal student loans and school loans that are supported by non-profit agencies through bankruptcy.
As per the law, a person needs to provide evidence before court of that he/she will be unable to maintain the even the minimal standard of living if the court forces the borrower to repay the loan. Student loans can only be discharged through bankruptcy if the borrower proves that he/she will not be able to maintain or keep up with the payment schedule nor there is any hope in the near future that the situation will improve. It is also important to convince the court that the borrower had made genuine efforts, also known as good-faith efforts, to repay the loan before filing for bankruptcy. According to this clause, the borrower had indeed made payments for a minimum period of five years when he/she was employed and had money.
If the borrower is unable to prove any of the above mentioned points, it is not possible to get his/her student loans discharged. If the court agrees to discharge the loan, the borrower is not required to make any payment towards loan repayment.
More Articles :
|
Bankruptcy And College Loans