For those who are struggling to meet their financial responsibilities, bankruptcy can be an option to unburden themselves from their debts and gain a fresh financial start. However, there are many factors you must consider before deciding whether bankruptcy is right for you.
In most cases, debtors are unable to discharge student loan debts in Chapter 7 or Chapter 13 bankruptcy. There is, however, an exception—if you can prove repaying your student loans would force you to undergo “undue hardship,” you may relieve yourself of your responsibility for repaying those debts.
Most bankruptcies filed in America are either Chapter 7 or Chapter 13 cases. The type of bankruptcy under which you file depends on factors like your assets, debts, income and general financial goals. Chapter 7 bankruptcy eliminates unsecured debts, including medical bills and credit card debts.
If you are struggling under the weight of your debt, bankruptcy is one option to help you find relief. However, it’s not the only option. Before you decide to file for bankruptcy, make sure you have investigated all the alternatives available to you.