When filing for bankruptcy, you take a positive, proactive step in reclaiming your financial future. But, while the process offers a way out of unmanageable debt, there are some responsibilities it typically can't eliminate, such as student loans. Below is a brief guide to the topic.

Student Loan Debt in Bankruptcy

Typically, you can't claim student loan debt as part of a bankruptcy. The general rule is a precautionary measure that prevents recent college graduates from filing for bankruptcy and taking advantage of these lenders. However, there is an exception to this rule when the issue of financial hardship comes into play.

Undue Financial Hardship

In specific circumstances, you may qualify to have your student loan debt cleared. People can only pursue this option after exhausting all others, such as working with the lender, devising payment plans, and making a good-faith effort to stay on top of regular bills. After initially filing for bankruptcy, you may get some or all of a student loan debt erased as long as you can prove undue financial hardship. The hardship must meet certain criteria.

For instance, is extenuating circumstances have placed a major, unforeseen financial burden on your shoulders. Though, this isn't the same as a poor economy or an inability to find a job, but, rather, being diagnosed with a serious illness. Similarly, if the hardship is chronic, ongoing, and will continue for the foreseeable future, you may have grounds for debt relief. Further, you must show that you tried to work with student loan creditors by setting up a plan or making full or partial payments whenever possible.

Not every claim of financial hardship will result in a dismissal of student loans. But, it's a viable option to pursue in a bankruptcy if you meet the above eligibility requirements. The fact that you are filing for bankruptcy can help further establish the presence of financial hardship in your life and lend support for a potential elimination of this debt.

If you want to file for bankruptcy, the attorneys at Greene Law PC have more than 25 years of experience representing clients throughout the Farmington, CT, area. They offer quality legal guidance through every step of the process to protect your rights and best interests. Visit the website, to learn more about their background and expertise in this practice area. Call (860) 676-1336 today to schedule a free consultation and explore your student loan options when filing for bankruptcy.