Student Loan Law
With nearly $1 trillion in student loan debt in the United States, student loan borrowers have a huge (and increasing) need for legal assistance.
How We Can Help You!
These days it is almost impossible for most students to attend college without some kind of financial aid. Most students who apply for aid receive student loans. There are two main sources for such loans; Private loans and Federal loans. Depending on the types of loans you have there are several repayment or discharge options available.
So just what is a student loan default? A student loan goes into default after 270 days of nonpayment. The two most common consequences of defaulting are Wage Garnishment and Tax Refund Interception. In addition, the default will result in a negative tradeline being reported to the national credit reporting agencies.
Our attorneys can review you loans help get you out of default. Our firm will work to establish a cure proposal for your student loan default. Often times a default can be cured by setting up an agreement with the United States Department of Education to put you onto small monthly payments. These payments can be based upon your ability to pay and start at very low amounts.
Student loans are difficult, but not impossible, to discharge in bankruptcy. To do so, you must show that payment of the debt “will impose an undue hardship on you and your dependents.”
Courts use different tests to evaluate whether a particular borrower has shown an undue hardship.
The most common test is the Brunner test which requires a showing that:
1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans;
2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and
3) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987). Most, but not all, courts use this test.
The most difficult of these requirements to prove is the third prong as the debtor is required to show that they exhausted all repayment avenues in dealing with this loan.
Our attorneys can sit down and review your current loans, programs available for repayment, and if necessary review a possible bankruptcy filing if a reasonable repayment plan cannot be met.