Bankruptcy help for those struggling with student loans

Young American adults are increasingly bonded by one common struggle. They are overwhelmed by student loan debt so significant that it is too often inhibiting their abilities to start families, own property, build credit and start their own businesses. It is now a well-known fact that one cannot ordinarily discharge student loan debt during bankruptcy. However, bankruptcy and student loans actually make a productive pair under certain circumstances.

Though young Americans will be hard-pressed to discharge any student loan debt in bankruptcy, filing for bankruptcy to discharge or reorganize other overwhelming debt can free up income to pay down student debt. In this way, bankruptcy can be a very helpful tool in addressing a substantial debt burden that includes both student loan debt and other sources of financial stress.

For example, if an individual has credit card debt, car loan debt, outstanding medical bills and student loan debt, filing for bankruptcy may reduce that person's monthly debt-related bills to student loans alone. By allowing the bankruptcy process to reign in other sources of debt, an individual's income can focus on daily necessities and student loan debt, making that particular financial situation manageable again.

Bankruptcy can help individuals and families obtain a fresh financial start so that they may build stable and bright financial futures. This option is appealing for many reasons and is a path chosen by millions of Americans annually. Though bankruptcy may not allow students to discharge their student loan debt, it can free up available income to pay those student loans down by discharging other overwhelming sources of debt.

Source: Huffington Post, "I Work Two Jobs and Can't Afford My Debt," Steve Rhode, June 21, 2013