Student Loans and Bankruptcy

People often ask us if student loans can be discharged in bankruptcy.  The short answer is “probably not.”

Bankruptcy is driven by The Bankruptcy Code, which is Federal law. The Bankruptcy Code states that student loans can be discharged if they impose an “undue hardship” on a debtor.  Seems simple enough.  But courts have interpreted the rule to include conditions which aren’t there in black and white. For instance, many courts require debtors to show that they’ve made “good faith efforts” to repay the student loans.  If debtors put loans into an income contingent repayment program (ICRP), though, they may be making very small or even no payments in some years.  Student loan creditors use the availability of the ICRP to show bankruptcy courts that student loans will not be undue hardship on debtors.

The bottom line is the ICRP may be the best option for a debtor struggling with student loan debt.

COVID-19 Advisory

Dent Law Offices, Ltd. is committed to the well-being of our team and clients, as well as third parties. During this time we are taking extra precautions to protect everyone with whom we interact while continuing to provide excellent service. Many of our clients are health-compromised and/or elderly, so we feel the only responsible approach is to be conservative. We are limiting in-person meetings as practicable and using the following protocols:

  1. Remember that much of our business can be handled by telephone or video conference.
  2. While our team is working, some remotely, our doors remained locked to control traffic. If you arrive unannounced/ unscheduled, please understand that, even without precautions, our on-site team maybe running errands or occupied with other clients/ meetings/ phone calls. It is best to call first to assure that someone will be able to assist you on arrival.
  3. When you arrive for any appointment/ drop in, please knock. Someone will be with you as soon as possible.
  4. Please wear a mask, even if you arrive only to drop off/ pick up documents.
  5. If you only need to drop off or pick up documents, please use our drive-thru window, located in the pass-through to our parking lot. For after hours drop-offs, a secure drop slot is located next to that window.
  6. If a discussion is necessary or you are here for an appointment, you will be taken to a private room near the entrance. You will also be required to wear a mask and to maintain social distancing.
  7. Again, we all need to do our part for the most vulnerable people requiring legal assistance at this time.”