Iowa is home to many great universities, liberal arts colleges, community colleges, and technical schools. Our state is fortunate to have a well-educated populous that boosts local businesses, grows the economy, and makes Iowa better place to live. But with education comes tuition, and with tuition comes student loan debt. For years, Marks Law Firm has helped Iowans throughout the state manage their student loan debt and figure out the best way to repay what they owe. Because many of our clients are at least considering bankruptcy, we often get a very specific question:
“Can my student loan debt be discharged – or wiped away – when I file for bankruptcy?”
The short answer is no. The long answer is that the only way student loan debt can be discharge is if it passes the “undue hardship” test, which I detailed several months ago. Go back and read that post for a detailed run-down on the specific rules and stipulations regarding student loan debt and bankruptcy. For now, let’s assume you are reading this post because you have considerable student loan debt. You may be tossing around the idea of bankruptcy, but you may not be sure how that will affect your student loan payments.
As I just explained, you are probably still on the hook for paying back your student loans even if you file for bankruptcy. It may still be beneficial, however, to look into filing for bankruptcy to help alleviate the pressure of other debts that make it difficult to make your student loan payments. Just because you can’t discharge your student loan debt in Iowa doesn’t meant that bankruptcy can’t be a useful tool. That being said, you shouldn’t therefore rush into bankruptcy just to create some flexibility.
It may seem like I’m flip-flopping here, but the truth is that everyone’s financial situation is unique, and deserves individual attention and care before taking a major step like bankruptcy. The only way to know if bankruptcy is right for you is by meeting with us in person for a consultation. Our team is flexible, and we’ll make sure we arrange a meeting time and place that is convenient for you. You have nothing to lose – our initial consultation meetings are obligation free and at no cost to you. Call today to take a productive step toward financial security!