Discharging Student Loans in Bankruptcy: Important Legal Terms
Discharging student loans in bankruptcy is a complex and difficult process, with important legal terms that must be understood. Bankruptcy is a legal procedure when an individual or business can no longer pay their debts. It allows the debtor to either liquidate their assets or reorganize their finances by negotiating payment plans with creditors. Student loan debt has become one of the most difficult kinds of debt to discharge in bankruptcy due to changes made by Congress in 2005. In order for student loan debt to be discharged in bankruptcy, certain criteria must be met, and some key legal terms should be known.
The first term is “undue hardship” – this term describes the financial status of an individual who cannot make payments on their student loan without suffering serious financial hardsip.
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