In my practice I have seen an increase in bankruptcy filings among college and graduate school educated individuals. As a result of a 2005 law no longer discharging private student loans, many of my clients have been asking if there is a loophole in the law. When it comes to discharging student loans, unless you can show that your loan payment is an “undue hardship” on you, your family, and your dependents, your student loans are ineligible for cancellation in bankruptcy. 
“Undue hardship” is difficult to prove unless you are physically unable to work and there is no chance of you making money. To discharge your student loans under this exemption, you must file a separate motion with the bankruptcy court and present your situation before a judge. People who are unable to pay their debts may file for bankruptcy under Chapter 7 of the federal bankruptcy code. This allows the court to “erase” your bills and have a fresh start financially.
If you have any questions on the topic of student loans as they relate to your bankruptcy filing please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. Web site at www.miamibankruptcy.info/.
– Timothy Kingcade
