Many Tennessee residents who go to college or have been through college know that student loan debt can be a considerable financial burden. They may also know that these debts are not easily discharged in bankruptcy and could plague an individual for a considerable portion of his or her life. However, a recent case involving student loans and bankruptcy could potentially lead to a change in the way student loan debt is considered.
Reports indicate that a man in another state recently opened a case in order to address his own student loan debt and the definition of “undue hardship.” Undue hardship is a phrase often used when it comes to discharging student loan debt, and if individuals can prove such hardship, they may be able to be released from some or all of their student loans. However, proving undue hardship can be considerably difficult because it lacks a legal definition.
The man currently has loan debt in the amount of $246,000. It was noted that if the man was able to find a job and continue making payments on his debt, his debt would still grow to approximately $500,000 due to interest accumulation. If the man wins his case, he could potentially reduce his own debt and change how bankruptcy handles student loans.
The idea of being in debt due to student loans can sometimes deter individuals from pursuing their education. It is an unfortunate reality that higher education can be considerably expensive, and loan interest can cause financial hardships even for individuals who are able to find jobs in their respective fields. If Tennessee residents are facing student loan debt, they may wish to find out more on how such debt is handled under bankruptcy and how potential changes could affect them.
Source: upi.com, “Bankruptcy case could make it easier to shed student loans“, Amy R. Connolly, Oct. 9, 2015