What Is An Undue Hardship?
Many times the debt you have accumulated, and the lender’s efforts to collect it, creates an undue hardship on you and your family. Think about it, can you really afford to receive a less than full paycheck? The answer is probably no, but that is exactly what can happen if you are subject to a wage garnishment. The result can be that you are unable to make your house or car payment, or put food on the table for your family. Sometimes, when debt is out of control at this level, the way out is to file for bankruptcy and stop the collection activities. Even in bankruptcy though, if you want to hang on to your house or car, you still have to pay. This can still cause a financial hardship, and so you have the right to have some debts wiped out due to the hardship caused.
The most popular debt people try to eliminate in bankruptcy due to an undue hardship is a student loan. This is a difficult task, because generally speaking you are not able to discharge student loan debt. But, if you can show the following, the Bankruptcy Court may agree with you and declare some or all of your student loan debt forgiven through the bankruptcy:
- You have to show that you have a made a good faith effort to obtain employment, but have been unable to do so.
- You have to show that paying back any part of the loan will result in financial destitution to you and/or your dependents.
- Factors such as a physical disability play a role, but are not determinative.
The test is a difficult one to meet, and the Court grants these requests infrequently. Showing that you are unable to provide for yourself and your family, and have no hope of doing so in the future can be hard. Sometimes the better approach is to work one on one with the lender, and provide them the details of your financial condition for a possible reduction the amount due or in the monthly payment. We can help you to make a decision about how to proceed in these unique types of cases, and will help guide you towards taking action that is likely to end in a satisfactory result.
If you have questions about bankruptcy and undue hardship, contact our office for help. We will explain your options, so you understand your choices and can make a decision that meets your needs. Call a Plantation, Florida debt relief attorney today for more information.