Ventura Student Debt Relief Attorney

Bankruptcy Attorneys Helping California Debtors With Student Loan Relief

Experts estimate that the combined student loan debt in the United States totals at least $1.6 trillion, as of March 2021. That amount of combined debt is simply staggering. Student debt is a crisis in the United States, especially as millions of Americans are struggling to get by in light of the novel coronavirus pandemic and other hardships. If you are struggling under the weight of your student loans, you are far from alone.

A seasoned and effective Southern California student debt relief lawyer at Rounds & Sutter can help you explore your options for financial freedom, including bankruptcy and other avenues. Give our bankruptcy and debt relief legal team a call today for advice, representation, and assistance with your student debts.

Historically, It’s Been Nearly Impossible to Discharge Student Loans in Bankruptcy

Many forms of debt, such as medical bills and credit card debt, are almost always incorporated into bankruptcy proceedings. These unsecured debts (meaning debts not attached to an asset like a car or house) are discharged upon conclusion of a Chapter 7 or Chapter 13 bankruptcy proceeding. Some types of debts are generally not dischargeable, such as past-due child support.

Student loans are something of a unique category of debt. Although the loans are not secured by any property and are not considered a priority debt, they are not automatically dischargeable. Instead, in order to discharge student loans in bankruptcy, the debtor must prove that continuing to require payment would constitute an “undue hardship” for the debtor. Courts typically use the so-called Brunner test to evaluate undue hardship. The Brunner test requires the debtor to demonstrate three elements:

• The debtor would be unable to maintain a “minimal” standard of living if forced to continue repaying their student loans.
• Circumstances indicate the debtor’s troubled financial situation is likely to continue for a significant period of time.
• Good faith. The debtor has made a good-faith effort to repay their debt.

Historically, courts set an extremely high bar to show undue hardship. “Minimal” standard of living was interpreted to mean essentially bare survival. Between the “poverty” and “persistence” prongs, debtors were basically required to show that they were utterly destitute and unemployable (such as if they have a permanent disability) in order to meet their burden. Thankfully, it’s getting better.

Student Loans Are Easier to Discharge Now

In recent years, courts have become more forgiving when it comes to student debts. They have begun to interpret the undue hardship test in a way that permits more student loans to be discharged. Instead of requiring a debtor to show that they are destitute and physically unable to work, courts have started requiring only that a debtor be able to show that repayment would prevent the debtor from maintaining a minimum standard of living. That “minimum standard” is somewhere above homelessness, but is somewhere below “comfortable.”

Surprisingly, by some estimates, as many as one in four debtors who file for bankruptcy and request discharge of student loans are able to get those debts discharged. Despite the historic difficulty of discharging student debts, with help from a savvy student debt relief lawyer, you might be able to find financial relief from your student loans.

Other Options for Student Debt Relief

There are a number of potential avenues for debt relief outside of bankruptcy as well. Depending on your circumstances and the nature of your loans, you could be eligible for government assistance, debt relief, or student loan debt settlement. Debt settlement, for example, allows you to negotiate a reduced interest rate, lower monthly payments, and even a possible lower principal amount, depending on the nature of your lender (specifically, whether your loans were private or federal).

Moreover, even if you can’t discharge your student loans through bankruptcy, you might find that getting your other debts discharged through bankruptcy will free up your income enough to allow you to repay your student loans affordably and on time. Talk to a seasoned debt relief attorney to explore your options for debt relief and learn whether bankruptcy or other debt-relief options may work for you.

Save Your Career. Protect Your Future. Call Rounds & Sutter to Explore Your Options

If you are facing significant student loan debt and are considering bankruptcy, speak with the experienced and detail-oriented student loan relief lawyers at Rounds & Sutter for a free consultation.  Reach out to us at our offices in Ventura, Santa Barbara and Westlake Village, and start your journey toward a better life.