Though many Ohio residents may be excited about the prospect of higher education or are reveling in the fact that they have received their degree, they may not be as enthused about student loans. Student loan debt can cause considerable hardships for individuals, especially those just starting out in their career fields or who have not been able to obtain employment in those fields. However, some individuals may find bankruptcy an option for mounting debt.
The possibility of discharging federal student debt through bankruptcy may be of interest to state residents. It was recently reported that such debts may be discharged by creditors if there is potential that the debt causes undue hardship to the debtor, though this is a difficult standard to meet. There are various considerations as to what may cause undue hardship, and among those are health factors, retirement age, personal financial circumstances and other factors.
Though a person could face undue hardship, he or she may still face challenges in getting the debt discharged if it is opposed in court. Therefore, fees and other expenses relating to proceeding through bankruptcy court may be taken into consideration. If the costs of litigation amount to more than one-third of what is owed on the loan, loan holders may accept a claim of undue hardship.
Financial matters can be complicated endeavors to sort through, and individuals with student loan debt may feel especially compelled to get their financial affairs in order. Therefore, Ohio residents who believe that bankruptcy may be able to help them work through their situation may find information on such options beneficial. Additionally, concerned parties may wish to consider discussing their situation with an experienced bankruptcy attorney to potentially gain a clearer view of such proceedings.
Source: The Huffington Post, “Department of Education Reaches Decision About Student Loans and Bankruptcy“, Steve Rhode, July 9, 2015