Not all debts are dischargeable
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Posted On :
Nov-10-2011
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Article Word Count :
505
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You have probably heard that bankruptcy brings great relief for those in deep financial debt and can no longer meet their obligations.
It is also generally say that if you go bankrupt debts are discharged.
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You have probably heard that bankruptcy brings great relief for those in deep financial debt and can no longer meet their obligations.
It is also generally say that if you go bankrupt debts are discharged.
However, not all debts are dischargeable and in some cases, bankruptcy is actually far from being a solution to debt problems.
Student debt and "undue hardship"
If you are buried deeper in debt, but your debt is mainly student debt you might want to reconsider bankruptcy since almost all student loans are not dischargeable. The law is clear when it comes to student loan debt: If repayment causes the debtor undue hardship, courts will not allow discharge of student debt.
The above figures apply for Chapter 7 bankruptcy and Chapter 13 Bankruptcy. So to be able to be released from debt you need to meet the "undue hardship" on request.
This implies an excessive poverty of the debt that would impair the ability of the debtor for the payment of basic needs causes. The greatest difficulty is to prove an undue hardship.
A little history
Student debt can be used to more easily dismissed in the past. But due to abuse, the legal requirements have been modifies Bankruptcy and now it is extremely difficult to get discharged.
The abuse consisted of filing for bankruptcy immediately after college, so always dismissed the student debt before joining the workforce.
If this practice became common, lenders complained and got the administration, the rules to change the controlled bankruptcy.
Discharged today
Currently, the emergency exception of government bondsand non-profit loans.
So it was more difficult to get debt held by students. Moreover, not only the fault of the debtor's ability to maintain an adequate minimum standard of living, but the debtor must have tried by every possible way to repay the debt to interfere.
Co-signer Responsibility
Even if the borrower meets all these requirements, all co-signer who subscribed to the loan with the debtor is not covered by the hardship exception, and thus will be the sole responsibility of the repayment of debt.
This is one of the major securities lenders, and explains why most need of the student loan lender a co-signer in order to grant a loan.
Final Thoughts
Fill in bankruptcy or not is a decision that must be considered and intensively in the need for a fresh new start, if it has to justify any other choice.
If a bankruptcy can not discharge your student debt, and if your student loans are the main component of your debt, then it makes no sense, all the bad consequences of a bankruptcy without being able suffering, to enjoy the benefits associated.
However, if your income is too low, your debt you can not even breath and there is no other way of recovering from this situation, you may be able to convince a court that is due to the excessive burden of your debt in itself, it should be dismissed.
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Article Source :
http://www.articleseen.com/Article_Not all debts are dischargeable_102822.aspx
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Author Resource :
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Keywords :
loan, debt,
Category :
Finance
:
Loans
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