You did what you thought you should by going on in school to further your education. You hoped it would benefit you financially in the future, but you’ve found that your student loans have been nothing but a drain on your pocketbook. You, like many other Georgia residents, are stuck with loans you feel you can’t pay down that keep gaining interest. This leaves you wondering if your student loans qualify for any type of relief, such as bankruptcy discharge.
In the past, the answer to that question would be a sharp no. Even now, many may tell you that such debts do not qualify for bankruptcy discharge. One woman’s story, however, shows that it is possible.
When this individual filed for bankruptcy, she claimed that, between 2006 and 2015, she had taken out 26 student loans totaling over $72,000. By the time of her filing, the loans totaled nearly $90,000. The interest was accruing at a rate of roughly $14 a day.
At some point, she took in one of her grandchildren who has special needs. She also experienced health problems that led to medical bills she couldn’t pay and her wages garnished by her employer. She had done everything to limit her expenses — Netflix being one of her only real luxuries. She even put her student loans on an income-driven repayment plan, but . She never got to the point where she had the disposable income to pay back her student loans, so she filed for bankruptcy.
The government said no, but a judge said yes
She filed for Chapter 7 bankruptcy in 2019. The Education Department rejected the request to cancel her loans. In 2020, a bankruptcy judge disagreed with the ED and allowed the discharge of the loans. The judge declared that the loans created an undue hardship on the petitioner and stated that her future income level was not likely to reach a point that would make it possible to repay the loans.
You don’t know unless you try
In this woman’s case, she tried to better her financial position and worked diligently to keep her expenses to a minimum. It just wasn’t enough to pay back her student loans. She asked for relief, and a judge agreed. If you can show that your student loans are an on you and you’ve done everything in your power to pay them back, you may be able to have them discharged through Chapter 7 relief just as this woman did. You don’t know unless you try.