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Columbus, OH Student Loan Debt and Bankruptcy



Student Loans and Filing Bankruptcy


Filing bankruptcy in Columbus Ohio and surviving high student loan debtsHigh student loan payments are often cited as a large part of the financial burden which leads to filing for chapter 7 or chapter 13 bankruptcy. While it is similar to other unsecured debts like credit cards or personal loans, in that there is no collateral that can be returned or repossessed, in 1976 Congress prohibited the discharge of federally guaranteed student loans through bankruptcy for the first five years, with the exception of conditions of undue hardship. The Bankruptcy Amendments and Federal Judgeship Act of 1984 added private student loans to this exemption from bankruptcy.


Student Loans May Be Discharged in a Bankruptcy Under Certain Circumstances

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 modified bankruptcy code to allow discharge of student loans only in the case that the debtor is able to prove that repayment of the student loans would cause undue hardship.


The criteria commonly used by courts to determine “undue hardship” is:


The borrower is unable to maintain a minimal standard of living for themselves and their dependents.

The situation or circumstances leading to this hardship are unlikely to change for all or most of the repayment period.

A good faith effort has been made to repay the student loans.


This does not mean that bankruptcy shouldn’t be considered by those struggling with high student loan debt. As each individuals and families situation differ, it is important to review your specific student loan debt and financial circumstances with a bankruptcy attorney. Even if you may not qualify for the student loan debt to be discharged through filing bankruptcy, the discharge of other financial burdens may provide the opportunity to put yourself into a good financial situation. Additionally, student loan providers offer numerous resources to allow borrowers to get caught up on student loan payments, as well as deferments, forbearance, and income based repayment plans.


Student Loan Debt can also be delayed and managed through the filing of Chapter 13 Bankruptcy. Since your student loan payments will be part of your repayment plan, you may pay a significantly reduced amount or possibly nothing at all toward the student loans during the repayment period, which could be as long as five years. You will then continue to repay your student loans after the Chapter 13 bankruptcy repayment plan has completed.


Student Loan Debt Relief Options

In addition to practicing bankruptcy law, the Columbus Ohio lawyers at Sheppard Law can assist you with debt relief options that may be available to help you to reduce or eliminate your student loan debt. Some of these options may include modification of the student loans or consolidation of the student loan debt. Our debt relief attorney can help you to determine if you qualify for additional federal sponsored plans such as Income Based Repayment (IBR), which limits the total amount of your monthly payment based on your taxable income.


If you are suffering from debt problems due to overwhelming student loan payments, bankruptcy may be an option to help you to get out of debt. Columbus, Ohio Bankruptcy Attorney Ken Sheppard, Jr. works with individuals and families to relieve student loan and other debts, including filing for consumer bankruptcy. Contact our bankruptcy filing office in Columbus, Ohio for a free initial consultation.

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Sheppard Law Offices - Columbus

Sheppard Law Offices

The Columbus, Ohio bankruptcy debt relief and taxation law office of Sheppard Law Offices, LPA is conveniently located just inside I-270 off of Cleveland Ave. Our offices provide a short drive from throughout Central Ohio including counties of Franklin, Delaware, Knox, Marion, Licking, & Fairfield. We regularly serve  Debt  & Tax needs of clients from  Columbus, Westerville, Bexley, Dublin, Sunbury, Delaware, Fredericktown, Johnstown, Centerberg, New Albany, Gahanna, Pickerington, Grandview, Upper Arlington, Clintonville, Groveport, Pickerington, Pataskala, Reynoldsburg, Groveport, Lewis Center, Worthington, Granville, the Short North, Hilliard, Plain City, Grove City, Newark, Mt. Vernon, Canal Winchester, and Lancaster.

Columbus Ohio Office

2600 Tiller Lane, Suite A

Columbus, Ohio 43231

Telephone: (614) 523-3106

Newark, Ohio Office

843 N. 21st Street, Suite 108

Newark, Ohio 43055

Telephone: (740) 345-7138

Akron-Canton Office

Belden Village Tower, 200

Canton, Ohio 44718

Telephone: (330) 409-2876

Mt. Vernon, Ohio Office

11 West Gambier Street

Mt. Vernon, Ohio 43050

Telephone: (740) 392-0404

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We are a debt relief agency. We help people file for protection under the U.S. Bankruptcy Code.