College students who get hit hard by the economy are often considered to be at more of a disadvantage than those who are already in the workforce — because if jobs are difficult to find, they are most likely to be impacted.
Student loan debt is another significant issue. And, while government programs have been created to help with these loans, they often only apply to federal loans.
So what is available to help Colorado students who consider bankruptcy? As the bankruptcy laws stand right now, most students aren’t able to discharge their student loan debt. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made it even more difficult to discharge student loan debt.
There are exceptions, however, including that the loans are an “undue hardship” to the borrower. Colorado Springs Bankruptcy Lawyer Stephen H. Swift is able to help students in this situation. Undue hardship is a tough standard, but essentially means that without discharging the loans, the person won’t be able to maintain an adequate living standard and repay the loan at the same time.
But there may be some help in the works. In the summer of 2011, several senators and representatives in Washington D.C. filed mirror bills that would allow student loan debt to be discharged again, which would repeal a key part of the 2005 law. So, there is hope.
How can Colorado bankruptcy help students in debt?
While bankruptcy may not be able to discharge student loans, it can still be helpful to many college students or recent graduates. When these young people get out of school, they are hungry for a job, but know that it won’t take long before they start receiving letters from lenders asking for repayment to begin.
It is likely they have other bills, including regular monthly bills associated with housing and food, other loans, credit cards and car loans that all must be paid. If the student is unable to find work quickly, or at a rate that can pay the bills, what should they do?
Filing for bankruptcy in Colorado may be of assistance. Under current bankruptcy laws, students can have a majority of unsecured debt, including medical bills, credit card debt and other types of loans, forgiven. That means that even if they are unable to show that the student loans are a hardship, more resources will be available to pay them off after discharging other debt.
In most cases, the student would be seeking Chapter 7 bankruptcy protection because it is designed for people who have few assets and low or no income. Many students fall into this category.
Why Choose a Colorado Bankruptcy Lawyer?
Under Chapter 7 bankruptcy, students can discharge their unsecured debt, often without liquidation of assets. But there are strategies to when and how bankruptcy should be filed. And it is a complex procedure that requires the legal advice of an experienced bankruptcy lawyer.
The Law Office of Stephen H. Swift is available for a free initial consultation to discuss your situation, your rights and whether bankruptcy is a solution to consider. Serving clients in in Colorado Springs, Pueblo, Denver or throughout the area.
Colorado Springs bankruptcy – 866-893-2440 or 719-520-0164 – legal consultation
