You did what everyone said you should do. You graduated from high school, went off to college and got your degree. Maybe you took a course of study that advisors said would be lucrative, or perhaps you followed your heart and graduated with a degree in a major you loved. Even if you were lucky enough to find work in your field, chances are the weight of your educational loans has never given you the chance to enjoy the fruits of your labors.

Like many in New York and across the country, you are under the debt of student loans, and this has created a snowball effect of debt. Perhaps during lean months, you used your credit card to make your loan payments or took out a personal loan to help you through until the next payday. Now you are considering bankruptcy to gain some relief from the debt, but how does the main culprit, the student loans, fit into that plan?

Student loans and bankruptcy

The average student loan debt for a recent college graduate is over $37,000. Yours may be more or less, depending on your course of study and depending on whether you continued beyond your undergraduate work. Other than mortgages, student loan debt is the highest consumer debt, with some 44 million Americans owing a total of around $1.5 trillion. Unfortunately, filing bankruptcy may not provide relief from student loan debt in the same way it helps with credit card debts or your mortgage.

Federal student loans are usually protected from bankruptcy discharge because of concerns that students would borrow funds with the plans to earn their degrees and file for bankruptcy. Nevertheless, if you can prove that repayment of the loan will create a hardship because of other circumstances in your life, and you have made a good faith effort to pay what you borrowed, the court may include the student loan debt in a bankruptcy claim.

Other options

Without a verified hardship, you may have to come up with other ways to eliminate the burden of the student loan. This may include seeking alternative payment methods based on your income or taking advantage of the discharge of other debts through bankruptcy to focus on paying your student loans.

The second option will require a careful filing for bankruptcy relief, and the support and representation of a skilled attorney may improve your chances of meeting your goals.