You are here: DIME Home > Debt Relief & Management > Will bankruptcy wipe out my student loan debt?

Will bankruptcy wipe out my student loan debt?

Many new college graduates are opting to apply for large student loans in the misguided belief that filing for chapter 7 bankruptcy is enough to get them out of any debt quagmire in which they find themselves if the job market remains soft. This is simply not the case.

Author: Leonard Simmons
Date: Dec 29, 2011 - 4:54:42 PM

Printer FriendlyPrinter friendly page

Many new college graduates are opting to apply for large student loans in the misguided belief that filing for chapter 7 bankruptcy is enough to get them out of any debt quagmire in which they find themselves if the job market remains soft. This is simply not the case.

Student loan debt is something that a great many people across the nation are faced with. Nearly 60 percent of students are in debt before they get their first real job. It is estimated that most students with loans have a debt of about $25,000 by the time they graduate. On the other hand, the unemployment rate for graduating youth was at about 9 percent. This led to a majority of them accepting jobs they are vastly overqualified for, figuring they could always file for protection if they do not make the high salary they expected.

The Wrong Mindset

Another issue here is that many students major in degrees such as psychology, sociology, liberal arts, and so on where the jobs in these fields are limited and thousands of other students are graduating with the same degree. These students took the easy way out and many of them are suffering because of it. Math, engineering, and if nothing else, business, should have been programs these students should have chosen. If they thought that they could erase their mistake by walking through the Chapter 7 bankruptcy door, they were incorrect.

The hard fact is that student loans are almost impossible to do away with in any other way than paying them off. The only reason why a student loan might be written off is if it is found that the person faces “undue hardship” in paying off the loan. And this is possible only with government student loans under certain stipulations. This option can be pursued when:

  • Paying the debt may push the person below the poverty line
  • Possess some kind of mental or disability
  • It can be proved that the person has made all possible efforts to clear the debt

The hardship discharge application is different from the regular ones and it has to be filed separately. The fees for this will also be separate from other associated expenses. A lawyer qualified in Chapter 7 bankruptcy cases will be able to offer guidance and swift action in this matter.

Chapter 7 Bankruptcy

Anyone filing for Chapter 7 bankruptcy has to first go through a couple of compulsory counseling sessions. These help in evaluating the person’s financial as well as emotional well-being. Sometimes, the counseling sessions may throw up some other forms of debt pay off strategy instead of having to file for bankruptcy. Also, if the person goes ahead with the bankruptcy filing, collectors will not be able to act against the plaintiff and instead the amount of interest will be added to the loan amount remaining. After bankruptcy ends, some mutually agreeable payment plans may be agreed upon.

Possible Repercussions

Talking to a lawyer with experience in filing for bankruptcy can be the best way to go about this. It may all seem easy enough to be done but is best left to a lawyer since botching this up can have a long term impact on one’s future and your job prospects. It will certainly affect your credit report which can affect obtaining loans for a small business, a car, a house, and interest rates you are levied with for years to come.

Asset List

The lawyer will be able to assist in consolidating debt and drawing up an easy re-payment schedule. The interpretation of the Chapter 7 bankruptcy is a very complicated process and hence, having a lawyer by one’s side is of immense help. According to Texas law, a trustee is appointed to gather and sell all the assets of the individual. The proceeds are then given to the creditors. Furniture, electronic equipment, and other such items become the first to be sold off. This can then be followed by the home and any property that the home is built upon.

Certainly, this is not way you want to start off your life after exiting college. Chapter 7 personal Bankruptcy is a last resort and not applicable in all cases.

Want to learn more about chapter 7 personal bankruptcy?


Get more information:

View all articles by Leonard Simmons

Link to this article:

Code to copy: <a href="">Will bankruptcy wipe out my student loan debt?</a>

Related Articles...

Top 5 Ways to Stop Being a Shopaholic

Jun 11, 2011 - 8:05:54 AM

Compulsive buying disorder may not seem like a common disease, but more people have it than you think. Common symptoms of this disorder include anxiety, mood problems, obsessive-compulsive hoarding, among other things. People who have it are more commonly known as shopaholics.... [Read the full story]

A Quick House Sale Can Be The Answer If Facing Serious Financial Issues

Mar 20, 2011 - 3:24:42 AM

Let's face it; the recession still haunts many individuals across the UK who are still suffering the severe effects, having either lost money on their property or through losing their income as job cuts and redundancies became strife as business closed down and still continue to close down. For many the unfortunate situation has already presented itself and homeowners have lost their homes because of being unable to afford their payments.... [Read the full story]

Abusive Debt Collection Practices

Jan 19, 2011 - 4:57:55 AM

Not too long ago I was having a very typical morning; I was reviewing my morning emails from clients and opposing counsel, sorting through the mail and having a meeting with staff and associates regarding our daily work assignments. However, later that morning I stumbled across a blog published by a well-known and heavily circulated debt collection organization, InsideARM. The blog was shockingly titled, "Guns Don’t Kill People, Debt Collectors Kill People?" Intrigued (and always interested in reading up on the industry to find out the new tricks and tips they use to try and deceive consumers) I read on.... [Read the full story]

How to get out of credit card debt

Dec 29, 2010 - 6:05:59 AM

Credit card debt is a major problem in the U.S these days. Statistics reveal that personal bankruptcy rates have increased tremendously and every family in the US carries almost $8000 credit card debt on an average. Credit card debt can get on your nerves and can very well turn you bankrupt. So you need to know how to tackle the situation before it is too late. Here are a few tips which would help you to get out of credit card debt before the situation gets out of control:... [Read the full story]

Newest Articles in Popular Topics:

Business & Marketing Computers & the Internet Entertainment Health & Fitness
Finding Ways To Save Money And Maximize Revenue In Business
Cooper's Golf Park Tees Off Their New Website
Fiinovation Adjudged CSR Team of the Year & Caring Company at World CSR Day
Reasons Why Kale Realty is the Best Real Estate Firm in All of Chicago
Montreal Tech Startup Kangaroo Rewards Launches Mobile Loyalty Program for Local Merchants
It is time we break out of the SEO Shelter
3 Strong Reasons You Should Start Your Own Blog
Evolve Your Career With CompTIA A+ Certification Exam
High speed VMware Backups - Powered by UltraBlaze(™) from Vembu
Things to Consider When Selecting a Domain Name for Your Website
Fling Boom "Launches" This Holiday Season
Beautiful Abstract Canvas Art is Up for Grabs
Buying Art as a Gift: Tips From an Expert
Complete Guide to the 2014 Gatlinburg Fine Arts Festival Released by Jackson Mountain Homes
Learn Blues Music Online-Alternative to Traditional Piano Lessons
Causes and Treatment of Acne
What Type Of Constipation Home Remedies Are There?
Manual Wheelchairs: Buying One
Instant Facelift with Dental Implants
Lasik Surgery Leading Correction Of Vision Issues

Home & Family



Enhance Your Learning Experience Through Best Responsive Elearning Development Tools
Best Apps for Learning German
Esvees is Cranbourne's Elite Hair Dressing Company
Ozone Generator
Practical Tips When Choosing Gates and Gate Openers for Your Home or Business
Why Cases are Required for Mobile Phones?
Are Dealership Services Worth It?
2015 Jeep Grand Cherokee Named Must-Shop SUV for Towing from
Online Selling With An Appraisal Advantage
Macsome AudioBook Converter released New Version V2.0.4
Aditi Ashok signs off with a double
Softball Coaching: Avoid Becoming A Nattering Nabob of Negativity
Softball Coaching Tips - The Funnel Approach
Pick Up Specialized Advice on Jumping Exercises Which Are Highly Effective
Vertical Jump Training Tactics to Increase Your Athletic Performance
Tips for Choosing the Right Paris Short Lets
Hostels - the best choice for working womens and college students
Perfect holiday? Book a cruise and sail in Croatia!
Say Aloha to Your Best Vacation Ever with Kohala Coast Properties
The Perfect Guide for a Fantastic Family Trip to Kansas City


Follow & Share Your Favorite Video Articles

Tell a Friend About This Site

Chamber of Commerce - on the Web logo

Subscribe to the eMarket SmartsTM Newsletter in order to keep up to date with what's happening with, get the emails on new video articles, featured articles, and more. Your privacy is always protected. We never rent, sell or trade your private information


Service provided by GetResponse Autoresponders

Recommended Associates

Latest Articles in All Categories

Putting Up a Small Commercial Printing Business
So You Might Be Unemployed And Desire To Become A San Francisco Real Estate Investor Now
Meditation and Mindfulness: Dealing With Emotion
CPA Websites: Five Essential Ideas for Composing Convincing Articles
Set Goals In Order to Come Up With Your Action Plan
Is the Air in Your Home Safe to Breathe?
Coarse Fishing Tackle Review: The JW Young 13ft Trotter Rod
Section 1031 Exchanges For San Diego Real Estate Investors
Phoenix Real Estate Investing For Highest Possible Earnings
Legendary are the Volk Racing TE37 Wheels
Developing the Next Generation Wall Station (ChaseDesk™) for Healthcare - A Case Study
What are step down transformers?
Introducing Sharehype, the Revolutionary Tool for Online Marketers
Rewards To Shopping For Austin Real Estate On The Web
Hydroponics for Beginners

Do you write?

Would you like submit your articles and have them approved on a priority status? Find out more about how you can become a Priority author for pennies a day! Click here. Home
  • Business (9328)
  • Computers & The Internet (5740)
  • Entertainment (1348)
  • Family (958)
  • Finance (1963)
  • Health (4246)
  • Home and Living (6670)
  • Marketing (6113)
  • Shopping & Product Reviews (2624)
  • Sports (694)
  • Travel and Vacations (1689)
  • Video Articles (1)
  • Editors Pick (1)