5 Steps for Proper Estate Planning
More than half of all Americans lack proper estate planning.
4 Stupid Reasons to NOT File Bankruptcy
EVERY. SINGLE. DAY. People find some crazy reason to talk themselves out of filing bankruptcy even though it will change their life for the better.
Is Student Loan Debt Dischargable in Bankruptcy
Student loan debt has been labeled a crisis in the United States. The total outstanding amount of student loans in America currently stands at just over 1.5 Trillion dollars. That’s more than is owed even to credit card companies. Needless to say, thousands of Americans are struggling with student loan debt each and every day. They are putting off buying houses, getting married and starting families. The payments and the weight of those payments are keeping people from being entrepreneurial and taking risks. Student Loans are a yoke around the neck of American productivity and frankly, it’s causing our society a lot of trouble.
For people who find themselves unable to pay all their bills, Bankruptcy is a great way to get back on the road to financial prosperity. Many people often come to our office asking if student loans can be discharged in their bankruptcy, as that alone is a significant contributing factor into why they can’t make ends meet. Unfortunately, the answer to the question, are my student loans dischargeable, is often no. Student loans are nearly impossible to discharge, especially in this part of the country. In other parts of the country, appeals courts have allowed discharge in certain circumstances that are very limited and still allows only a select few to actually qualify for discharge and then it’s usually only a partial discharge. There are very few times that student loans are dischargeable and only if certain criteria are met.
In order for your loans to be discharged you must prove what the court calls and Undue Hardship. What actually qualifies as an undue hardship is usually up to the court of appeals that is deciding your case. In order to qualify for an undue hardship you must pass what is known as the Brunner Test. The test is composed of 3 basic things:
- The debtor is unable to maintain a minimum standard of living for themselves and their dependents with their current level of income and expenses.
- Their current financial situation appears that it will continue throughout the course of the repayment plan and finally
- The debtor has made a good faith effort to repay all the loans that they took out.
IF the court determines that you meet these criteria then they would cancel part or all of your outstanding student loan debt. I will be very honest. In the decades our office has been operating we have only had 1 client actually have their student loans discharged and that client was going through a terminal disease. Sadly, it probably isn’t going to happen. There are, however, other options available.
Filing a Chapter 13 or Chapter 7 bankruptcy can allow you to discharge many of your other debts, including medical debts and credit card debts that are taking up valuable disposable income. That income, if freed up, could allow you to get your student loans paid back very quickly and allow you to get that burden off your back for good.
If you are feeling overwhelmed by debt, including student loans, come see the experienced and friendly attorneys at Harmon and Gorove. They have decades of experience in handling bankruptcy cases of all kinds and they can help you decide which path is best for you during our free, no obligation consultation. Contact us today to see how we can help you become debt free.
Tackling Credit Card Debt
With credit card debt in the United States nearing 1 TRILLION dollars, it’s easy to say that a great deal of people are feeling overwhelmed by the debts carried on their revolving accounts. Many people who carry balances on their credit cards pay just the monthly minimums and ignore the problem. This is NOT a good plan. Pretending your debts don’t exist just makes the problem that much worse. This strategy will backfire on you every time in the long run. It will make you miserable, it will cause you to be unable to save for the future and it could eventually drive you into bankruptcy.
If you are interested in trying to get started on paying down your long term credit card debts we have some advice for you. The best strategy starts with the first step and that step is often to modify your spending habits by creating a budget and sticking to it. Just small modifications to your daily routine can mean big savings that you can then start using to pay down your balances one at a time, always starting with the payment with the highest interest rates.
Step one is to decide on a repayment strategy. Don’t allow yourself to continue to drown under the weight of multiple credit card payments each month. If you start working your way down from the top (meaning you pay off your biggest balance or highest interest rate) you can begin to reduce your debts quickly, freeing up more and more disposable income that you can then use to continue to pay off other debts.
Another step you can take is to communicate with the people you owe money to. If you’re struggling with the exorbitantly high interest rates that are routinely charged by credit card companies, sometimes just giving them a call and asking for an interest rate reduction will allow you to free up more money to pay down the principal on the card each month. Sometimes credit card companies will work with you on rates if you’ll commit to repaying the debt at that lower interest rate.
There are lots of options available to you if you feel like your drowning in credit card debt. The attorneys at Harmon and Gorove can help you find a way out of debt for good. Contact us for a free, no obligation consultation to find out how we can get you started down a path to financial freedom.