You should feel proud if you’ve graduated. Whether from high school, college, university, or graduate school, graduating shows your tenacity and integrity. Unfortunately, there’s often another side to graduation that far too many Americans and New Yorkers worry about: student loans. Whether you’ll need student loans to afford higher education, or you’ve accrued more student loans than you think you can afford, the question of how students can become financially successful while drowning in debt is a serious issue. To learn what you can do, continue reading below.
New York Bankruptcy Lawyers Can Help
Lingering student loan debt can take a major toll on your peace of mind. If you have significant student loan debt that you are struggling to pay off, you have options. While bankruptcy may be one of them, there are other viable means of regaining your financial footing. Discover the avenues to your financial freedom by consulting with an experienced bankruptcy attorney. Law Office of Simon Goldenberg attorneys will guide you on how you can eliminate or reduce your debt. If you are considering debt relief solutions, including filing for bankruptcy, the attorneys at Law Office of Simon Goldenberg are here to help. To consult with Law Office of Simon Goldenberg, call (888) 301-0584 or contact us online.
What Is Bankruptcy?
More than likely, you’re familiar with the word bankruptcy, but do you know what it means and what it does? For starters, it’s not something that only wealthy people and celebrities can file. Everyday workers can file for bankruptcy, too. This means that you can file for bankruptcy. When you file for bankruptcy, you’re either asking to no longer be on the hook to your creditors (i.e., whichever agencies loaned your money to pursue your education) or to be put on a payment plan that’s in keeping with your income.
Typically, most Americans file for Chapter 7 or Chapter 13 bankruptcy. Although there are several differences, you should know that the court requires you to liquidate many of your assets if you file for Chapter 7 bankruptcy, and most of your personal loans are wiped out. This is the most common bankruptcy chapter to file, although many people dislike losing assets, such as their vehicle, jewelry, and home. Thankfully, there’s often money left over from the liquidation that will help you start fresh. On the other hand, if you file for Chapter 13 bankruptcy, your bankruptcy trustee puts you on a three-to-five-year payment plan.
What Is The Brunner Test?
Regardless of which bankruptcy you file, there are certain debts that you can’t discharge. Student loans tend to fall into that category. In fact, a bankruptcy judge discharging your student loan debt is so rare that most trustees will tell you that it’s impossible to discharge them. Yet, that’s not necessarily true. A bankruptcy judge can discharge student loans if you prove that they’re causing you undue hardship. In New York, you prove that you’re suffering undue hardship by passing the Brunner Test. Then a judge will discharge your debt.
Can You Maintain A Minimal Standard Of Living?
Let’s consider two different scenarios. First, a bankruptcy judge will inquire whether your current income and expenses allow you to maintain a minimal standard of living. Suppose you live with your parents and don’t pay rent or buy groceries. You earn $2000 a month, and your student loans are $1200 a month. In this case, a judge may find that $800 is sufficient because you’re a single person who doesn’t have any other bills to pay. Now, suppose you live with your parents and earn the same amount as above. But here, you have two children. A judge is less likely to find $800 is enough to feed three people.
How Long Will This Hardship Persist?
A judge will also inquire whether there’s an additional expense or some unique information that adds to your financial burden and whether it will persist for an extended period. Thus, it’s imperative to include debt-related information, such as being financially responsible for your rent, renter’s insurance, and car insurance. If you are only responsible for these bills for a few months or a couple of years, a judge may find that your hardship won’t persist for a significant length of time and deny your claim.
But let’s say you have a severe injury or ailment that negatively impacts your ability to work or adds undue stress to your life, and this injury or ailment will last for years. Here, the judge may find that your hardship is persistent.
Have You Shown A Good Faith Effort To Repay?
Thirdly, a judge will inquire whether your payment history demonstrates a good faith effort to make on-time payments. Here, even if you were short on a few payments or paid a few days late, a judge is likely to look at you favorably if you paid some money towards your monthly student loan bill rather than nothing at all. It’s always better to pay something than nothing at all. Even paying something as low as $25 or $50 on a bill that’s $500 each month, when that’s all you can afford, is a good faith effort.
Why Do I Need A Bankruptcy Lawyer?
This may sound straightforward, but the Brunner Test is frustratingly difficult to pass. Many have tried and failed. You can have an advantage over those others by hiring a reputable New York bankruptcy lawyer. A bankruptcy lawyer knows how to file student loan bankruptcy paperwork accurately and timely, which documents to include, and how to state your unique financial hardship in a compelling, sympathetic, honest fashion. Moreover, a lawyer will provide you with expert advice that you can’t get from the internet.
If you’d like to increase your chances of successfully discharging your student loans, consult with the bankruptcy lawyers at Law Office of Simon Goldenberg. We have years of experience that you can trust. But don’t just take our word for it. See our clients’ testimonials here. To speak with one of our lawyers, call us at (888) 301-0584 or contact us online for a free initial evaluation today.