Under the bankruptcy code, it is very difficult to discharge a student loan. But if you are permanently and totally disabled, you might have a good shot at being successful.
This is because one of the requirements for doing so is that your inability to pay must be a "persistent state of affairs," i.e. your dire financial straits must continue for a significant portion of the repayment period of the student loans. An inability to work, for the rest of your life, would certainly qualify. Many courts have agreed.
How Can Being Disabled Help?
For example, in a bankruptcy case in Maryland a 63-year-old woman with Asperger's Syndrome (a condition on the autism spectrum) was able to discharge over $300,000 in student loans!
The woman, Carol Todd, began attending the University of Baltimore School of Law in 1992, but never graduated. She later obtained a master’s degree from Towson University and a Ph.D. from an unaccredited online school.
Unfortunately, according to Todd, after obtaining them she was unable to get a job due to her disease. The judge wrote in her opinion, that,
“to expect Ms. Todd to ever break the grip of Autism and meaningfully channel her energies toward tasks that are not in some way either dictated, or circumscribed, by the demands of her disorder would be to dream the impossible dream.”
What If I'm On Social Security Disability?
In those cases in which the debtor was receiving Social Security Disability, the courts have noted that the condition for which the disability was being received was “persistent.” In one case, the debtor's sole monthly income consisted of $971 in Social Security Disability benefits.
The court found that the condition that led to her receiving SSD was considered persistent, and even if she returned to work, the loss of Medicare would cause her health care costs to skyrocket. Thus a disability can be a strong argument for this part of the test, especially if your sole source of income is Social Security Disability.
So What Do I Do?
If you live in southern New Jersey, are disabled, and owe student loan debt that you cannot afford to repay, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.
If you have more questions about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.