America’s total student loan debt currently exceeds $1.6 trillion spread among 43 million people. These borrowers often struggle to make their payments and secure their financial goals, leading some commenters to label the student loan situation a crisis. Fortunately, student loan forgiveness is available for those who are unable to make ends meet while paying off their balances.

As you weigh the available alternatives for handling your debt, you should understand how the law may affect your decision. From bankruptcy to a multitude of loan forgiveness programs, the right program for you will take into account such factors as your total outstanding balance and income. Having trusted legal counsel can help you make an educated decision of how best to eliminate what you owe.

Turn to Pleasant Legal Solutions. We can review your student loan debt situation and help you take advantage of the forgiveness option that matches your needs. Find out why so many Alabamian borrowers trust our guidance.

Bankruptcy Options for Student Loan Borrowers

It has historically been next to impossible for any borrower to discharge their student loans through bankruptcy. And while the process is still challenging, recent changes to the rules have made it easier for borrowers to declare Chapter 7 or Chapter 13 bankruptcy and obtain full or partial debt forgiveness. The borrower is required to file a separate lawsuit known as an adversary proceeding if they wish for the bankruptcy court to consider discharging their student loans.

Student loan debt is some of the most difficult to discharge because the borrower must meet the standard of undue hardship. Essentially, the borrower has to prove at least three elements:

  • Inability to maintain a minimal standard of living: This means that if the borrower had to repay their student loans, they would not be able to afford basic necessities for themselves and their dependents.
  • This situation is likely to persist: The above problem should not be temporary, but should instead be reasonably projected to last through the life of the student loan repayment plan.
  • Good faith repayment effort: The borrower must produce evidence that they attempted to at least pay part of what they owe before turning to bankruptcy.

How an Attorney Can Help With Your Student Loan Bankruptcy

The undue hardship test is a challenging but not impossible standard to meet. A knowledgeable attorney can do the following to assist you:

  • Review your circumstances and explain your options: We can start by examining your current debt situation to see if you can meet the undue hardship test. Next, we can explain the advantages and disadvantages of Chapter 7 and Chapter 13 bankruptcy to help you decide which path to take.
  • File your bankruptcy and adversary proceeding actions: If bankruptcy is the right path for your student loan forgiveness, we can file and serve all necessary paperwork. This includes preparing and filing the adversary proceeding lawsuit so you can tackle the loan debt.
  • Gather evidence: It is up to you to demonstrate an undue hardship, and this requires verifying your income and expenses. Our firm can gather your pay and other income records, document your expenses, and work to show the precise financial issues that are causing you to experience hardship.
  • Show good faith repayment efforts: This is another important record-gathering process which requires proof that you have done what you can to avoid bankruptcy. Communications with your lenders, monthly loan statements, payment records, and details of the options available to you will help establish this.
  • Litigate your case: Your lenders have the right to be present in Alabama bankruptcy court to contest your undue hardship request. We can handle all bankruptcy hearings and other litigation matters to advocate for the outcome you deserve.
  • Help you understand the results: The bankruptcy court, if it agrees with your hardship petition, may fully or partially discharge your debt. We will discuss other possible results of your bankruptcy like stopping collection efforts and allowing you to reorganize and pay down your debt.

Other Student Loan Forgiveness Options

Bankruptcy is not the best choice for all student loan borrowers, and many who wish to use it might not even be eligible. If you are unable to use bankruptcy or it is not a good fit for you, there may be other avenues of loan forgiveness. Our firm can help you explore and apply for the following programs (among others):

  • Public service loan forgiveness
  • Teacher student loan forgiveness
  • Borrower defense to repayment
  • Closed college or university loan discharge
  • Unpaid refund discharge
  • Total and permanent disability discharge
  • False certification discharge
  • Perkins loan cancellation and discharge

These programs have their own unique eligibility criteria and requirements, which may apply to your specific situation. We can explain how these options work and help you apply for them.

Alternatives to Student Loan Forgiveness

Although forgiveness is the ideal way to deal with your student loans, there are other ways to manage and pay off what you owe. Some examples include:

  • Debt consolidation: By grouping your student loans together, you may be able to secure a lower interest rate and save money on your monthly payments. If you have poor credit and do not qualify for traditional debt consolidation, you may be able to work with a nonprofit credit counseling agency.
  • Deferment or forbearance: With a deferment, you can temporarily pause your student loan payments and possibly avoid interest payments. Meanwhile, with a forbearance, you will have to pay interest on your loans but can still suspend payments for a while.
  • Income-driven repayment (IDR): IDR plans are available for federal student loans. Your income will determine your monthly payments, which will be significantly lower than a standard repayment. You can potentially qualify for total forgiveness after 20 or 25 years of participating in IDR, although you may owe taxes on the amount forgiven.

Contact Our Hoover, AL Student Loan Forgiveness Attorney

Our firm understands the stress of student loans, which is why we work hard to help borrowers understand and take advantage of the options they have. From bankruptcy and loan forgiveness programs to alternatives such as consolidation, let us take a look at your precise situation and advise you accordingly. Connect with Pleasant Legal Solutions to get started today.