You can file for Bankruptcy in some cases!

It is a well known fact that people with student loans cannot file for bankruptcy, however that is not always true. There are 3 very difficult conditions one must be able to meet.

1)Unable to pay both now and in the future
2) Significant effort demonstrated to make payments
3) Undue hardship

Let's start with 1).

This reason alone will qualify most recent grads. Although the economy does suck now, experts have it that it will improve, and although now you can't afford to pay a penny, you may be making a pretty penny in the future, and be able to afford your student loans and more. They will compare the going salary in your field to what your student loans are now. Since average income for degreed individuals can be about 30-40,000 depending on the field. Even if you have $200,000 in debt you probably won't be excused. And this is definitely the case, if you studied in sciences/mathematics (eg., engineers, doctors, nurses, etc). Maybe if you're a teacher you can squeeze by on this rule? Who knows. If you aren't in one of the above categories , keep reading

2) The easiest.
What do you own? Are you sending your kids to private school, living in a 5,000 sq ft house, driving a Porsche, Hummer and a Mercedes, dining at Flemings' on the weekend? Cut out these expenses, and go to public school like the rest of us, rent a cheap foreclosed house, drive a Toyota (they are cheap nowadays), and eat food from the grocery store, dude, like the rest of us! You will then be surprised at how much you can afford IN ADDITION TO your student loans. On the contrary if you happen to be living in a shelter, riding your bike to work, and eating at the soup kitchen, and throwing all of your income into your loans, you may have a fighting chance. Really and simply, as long as you aren't vacationing and dedicating a significant portion of your income to "entertainment related expenses" and, if you are unemployed can provide proof of the gazillions of resumes you've sent out (thank God GMAIL saves everthing you send), you may very well get by on this one.

3) Now this can go easy or hard depending on your position. If you are a single mom, with 2 kids and a special needs baby who decided to take out 6 digits of student loans to finance your degree you are definitely experiencing some undue hardship. On the contrary, if like most recent grades, you live with your parents, are unmarried, have no kids or husband, or other dependents and have no other source of debt, this may prove difficult. Yes, other debt can help you out here. If you like the other Americans who are currently living in bailout heaven but an expensive house or a boob job on credit than you might get that discharged, and not an a well-earned education, than you may get that debt discharged, which still leaves your student debt, but at least some is gone. Mental and physical disabilities can help alot here---not to be insensitive, but it's the truth. If you haven't been able to keep a job because of depression or other debilitating circumstance, mental or physical and can provide proof, doctor's visits' etc you may be ok. If you have a terminal illness, definetely this will work in your favor. Again , I am not trying to be insensitive as these are bleak circumstances. I'd take my current situation with student loan debt, before this, but I just thought I'd mention it. In these cases, several student loan companies, and maybe even private ones have discharge or assistance clauses for those with disability or death.


Extenuating Circumstances?
Cosigner? If you have a cosigner, you can take all of 1, 2 and 3 and ask if your cosigner meets the same set of circumstances. If your cosigner signed on the dotted line, specifically for a student loan, they are just as responsible to pay as you. So, if they don't meet 1, 2 or 3 than forget it, because the loan company will just go after them (this is assuming you have already asked your cosigner for support).

What do you own? The bankruptcy court will consider your assets, yes that means everything you own. If you own a house, car, boat, 2 houses, 2 cars, 2 boats, whatever? And if they can determine you don't need one of those things and could pay if you sold it, then kiss bankrupcty goodbye. That is why you can't drive a hummer, live in a mansion, etc., and complain about debt.

We've all remember, Latrell Spreewell making 12 mill a year saying he can't feed his family, and we all said if he would just alter his lavish lifestyle he could afford it, well, my dear, though we are talking about a lot less money, bankrupcty court will say the same to you should you own more than the average bear.

So if this sounds like something you can bargain for. Check for a consumer debt lawyer in your locale. Give them a call. Often, cosultations are free. Some other extenuating circumstances to consider are the trend and bias of the court that would be taking this trial. Judges do have bias. A judge who is a former debt prosecutor (happens to be a judge in Riverside bankruptcy court, ha!) will not have as much sympathy as a former consumer rights lawyer. Your local lawyer, if they are good, should be well connected, and know this information or be able and willing to find out. If they don't, call the next guy. Try to stick with a lawyer who has worked with student loan debt specificallt and knows the ins and out, as student loans are a very specialized form of debt.

To find a lawyer, google to find your local state bar association.For example, California's Website is www.calbar.ca.gov, and was the first result. Here you can check if a lawyer's been disciplined, how long they've been in practice, if they went to a school where you can pay for your degree (University of Spoiled Children)j/k, and other little ditties you may want to know.

That's all for now kiddos. I hope this helps someone.