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Can you discharge student loan debt in Chapter 7 bankruptcy?

You went back to school to improve your life. You expected that school would help you find a more secure, better paying job. It was easy to think that you could easily pay back your student loan debt once you had a good paying job.

Unfortunately, not everyone with a college degree can find a high paying job. Not everyone who goes back to school finishes acquires their degree. Regardless of the outcome of your educational endeavors, paying back your student loan debt is a legal obligation. Even if you didn't finish school, that debt will follow you. Many times, student loan debt can't be discharged.

There are programs that can help you consolidate your student loans into a loan with a lower, fixed interest rate. In some cases, this can be helpful for those struggling with student loan debt. Your current student loan lender may be willing to refinance your loans as well, if you call and ask. Sometimes, having a bankruptcy attorney call on your behalf can help motivate your lender to cooperate.

Why is student loan debt hard to discharge?

There are federal laws in place that make most student debt nondischargeable. That means that, unless your situation meets certain very specific requirements, your student loans will still be due and payable following bankruptcy. In some, limited circumstances, it may be possible to discharge some or all of your student loan debt.

Discharge of certain student debt may be possible

If the school that you attended with your student loans was not an "eligible educational institution," you may be able to discharge your student loans as part of your bankruptcy. An eligible educational institution is one that is one included on the U.S. Department of Education list. The list updates annually. The list considers factors such as accreditation, graduation rates and academic rigor. If you borrowed money to attend a school or program that is not on the list maintained by the Department of Education, it's possible you may be able to discharge your student debts.

An attorney is invaluable in complex bankruptcy cases

Trying to discharge your student loan debt is far from a simple bankruptcy case. You will need the help of an experienced attorney who understands state laws and federal laws when it comes to bankruptcy. Student loan debt discharge is rare, but it is not impossible. If student loans from a non-eligible school make up a substantial portion of your debt, you owe it to yourself to speak with an experienced Louisiana bankruptcy attorney about your options.

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