Effects of Bankruptcy on Education - Total Bankruptcy
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Bankruptcy and Your Past and Future Student Loans

Personal bankruptcy may seem like the right decision for your finances now, but some people worry that it might have ripple effects on their future. Specifically, many people worry that a personal bankruptcy filing in their past might affect their potential to pursue higher education.

While bankruptcy typically may not be used to clear debt related to student loans, filing may help give you a fresh financial start. Bankruptcy may help clear credit card or personal loan debt that accumulated while you were in school. With the burden of debt cleared you may be in a better position to pursue more education, which can often be very costly. 

What are your options? Find out by speaking with a local bankruptcy attorney. Find out how your case and local guidelines apply to your plans for the future. Complete the free form on this page to connect with a bankruptcy lawyer near you right away.

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Bankruptcy and Your Education

So how might a bankruptcy filing affect the future of your education? Here’s a look at some of the ways in which bankruptcy and education are (and are not) intertwined.

  • Bankruptcy & educational loans: If you decide to file for bankruptcy at a time when you already have debt from student loans, your bankruptcy filing will likely not have any effect at all on your obligation to pay those loans. In other words, student loans generally cannot be discharged in bankruptcy.
  • Federal student loans after bankruptcy: Federal bankruptcy statutes have non-discrimination clauses that mean even those with bankruptcy filings in their past should be able to get some federal loan assistance.  However if that person has previously defaulted on their student loans, that may affect their ability to secure a federal student loan.
  • Private student loans after a bankruptcy: Private student loans may be more difficult to come by after a bankruptcy filing, simply because they’re not governed by the same rules as federal loans. If you recently filed bankruptcy and haven't been able to build your credit score back up these loans may be more difficult to get.  If you’re concerned about your ability to get private loans because of a bankruptcy filing, you may want to speak with a financial aid adviser or with your bankruptcy lawyer.
  • The hardship exemption for repaying student loans: While student loans are generally non-dischargeable in bankruptcy cases, there are exceptions. If a filer can prove that making student loan payments would cause undue financial hardship, and that the filer’s financial situation is not likely to change for the duration of the loan repayment period, the bankruptcy court may discharge the loans. Note, though, that such cases are not common.
  • College admission and bankruptcy: Having a bankruptcy in your past should not prevent you from being admitted into college. While performing credit checks for potential employees has apparently become common practice in many workplaces, it does not seem to occur in colleges.

Speak with a Lawyer about Bankruptcy and Your Future

If you’re eager to learn more about the potential effects of bankruptcy on education, take advantage of an opportunity to speak with a bankruptcy lawyer practicing near you today. A bankruptcy lawyer may answer your questions about the laws and how they might affect your plans for the future. Get a free case evaluation with a lawyer near you when you complete the free form on this page.

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