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Managing debt that is not dischargeable in bankruptcy

There are many reasons why people end up filing for bankruptcy. Two of the most common reasons are medical debt and credit card debt. However, today, student loan debt is beginning to outpace all other forms of debt in terms of the overall burden the debt impossess on every day Americans. Tennessee students, or the parents of students that may be soon facing student loan repayments, might find the following information helpful.

Nearly everyone has student loan debt these days. Whether a person attends community college, technical school or a four-year college, the cost of higher education have skyrocketed, and most Americans do not have that kind of money lying around. However, attaining a college education is now considered to be an essential step in reaching the middle class and achieving the American dream. The question then becomes, how does the average American deal with all this debt?

Student debt is difficult to extinguish in bankruptcy. In the mid 1970s the congress introduced education amendments to the existing bankruptcy laws. These amendments effectively excluded student loans from the types of debt that are otherwise dischargeable. Today to discharge student debt the consumer must prove that the debt creates an undue hardship. This is a very high standard to meet and very few people do.

While discharging student debt may be difficult there are ways to tackle the problem. For one thing, most debt, like credit card debt, is dischargeable in bankruptcy. If a person is struggling to pay back their student loans, discharging other debt, like credit cards, might free up the money to pay debt that is not dischargeable. The important to remember is that there are always options.


Source: Minnesota Daily, "An 'undue hardship': Bankruptcy laws only intensify the institutionalization of crippling student loan debt," Eric Best, November 06, 2012

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
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