People here in New Jersey struggling with paying federal student loans often think that bankruptcy is the only way out of their situation. But then they find out how difficult it is to discharge those loans in that bankruptcy, and become discouraged. If this sounds like you, you should know that there are some non-bankruptcy solutions to the problem.
How Can I Get an Administrative Discharge?
This is because for federal student loans, there are certain circumstances where you can get the loan discharged administratively. They are:
- Permanent and total disability
- Closure of the school before you completed the program
- The false certification of you for the educational program the loans paid for
- Unpaid refunds by the school
- Death (yours or of your child if it is a Parent PLUS loan)
This last may seem a bit severe, but the tragedy of losing a child should not be followed by the continued financial burden of the student loan.
Also, if you dropped out of some classes before the deadline to do so, and the school did not refund to you the cost of those classes paid for by the loan, you can get that portion discharged.
The first item, disability, is often the best alternative to bankruptcy. Instead of trying to prove undue hardship based on an inability to work because of disability, why not just apply for the discharge directly to the U.S. Department of Education? That path can be much more straightforward, as well as less expensive as far as legal fees are concerned.
So What Do I Do?
If you are looking for a solution to your student loan problem and wondering if there is one, then there is a great way to find out for free! Just click here to provide me with all the details on your loans. I will then, for free and with no obligation on your part, look at your situation to see if I can provide you with a way to deal with them. If there isn't one, it didn't cost you anything. If there is, then I will contact you to schedule an analysis session with my office to lay out a plan of action.
If you would like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.
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