September 12, 2008, Newsletter Issue #85: Bankruptcy And Loan Repayment

Tip of the Week

Going into bankruptcy proceedings, many student loan borrowers mistakenly believe that the debt they have accrued to pay for their education can be included and discharged. However, this is a very complicated process and rarely occurs. In order for a student loan to be forgiven during bankruptcy, the court would have to determine that repayment is causing too much of a hardship for the person. In cases where it is decided that the student loan can be discharged in the bankruptcy proceedings, the full amount is forgiven.

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