Phoenix Student Loan Debt Bankruptcy Lawyers

Discuss options on handling student loan debt with a Phoenix attorney at Hilltop Law Firm by calling (602) 466-9631.

Helping You Manage Your Student Loan Debt in Phoenix

In Phoenix, Arizona, higher education is a trusted route to improved career prospects and personal development, providing essential skills for success. However, the burden of student loan debt can become overwhelming. Understanding the details of complex loan structures and terms is required when filing bankruptcy involving student loans.

For dedicated assistance in managing student loan debt, reach out to a Phoenix debt settlement lawyer at Hilltop Law Firm. Led by Cy Hainey, a lawyer with extensive experience in bankruptcy and debt relief, Hilltop Law Firm offers personalized solutions. We are here to help you forge a path toward a brighter financial future.

Contact us at (602) 466-9631 for a free consultation to explore your legal options, and let’s see how we can help.

Different Types of Bankruptcy: How Is Student Loan Debt Handled?

Bankruptcy comes in various forms, and understanding how each chapter addresses student loan debt is crucial in decision-making. Student loans present unique challenges in bankruptcy proceedings. Student loans are treated differently from other debts, causing issues for those who seek relief by filing for bankruptcy. Chapter 7 and Chapter 13 offer different solutions for individuals facing the burden of unmanageable student loan debt.

Chapter 7 - Liquidation for Debt Resolution

Chapter 7 bankruptcy involves liquidating assets to pay off debts, offering a clean slate for a fresh financial start. However, when it comes to student loans, discharging them under Chapter 7 is challenging but not entirely impossible. The court employs a stringent standard known as the “undue hardship” test. Proving undue hardship requires demonstrating that repaying the student loans would impose an exceptional and enduring burden on the debtor, encompassing factors like poverty, minimal income, and a lack of future earning potential.

Chapter 13 - Repayment through Reorganization

In contrast, Chapter 13 bankruptcy focuses on reorganizing debts under a court-approved plan. This chapter allows individuals to create a manageable repayment plan, potentially making paying off their student loans more feasible. While Chapter 13 doesn’t guarantee the complete discharge of student loans, it offers a structured approach for debtors to gradually repay their outstanding balances over a specified period, typically three to five years.

Key Differences Between Chapter 7 and Chapter 13

• Chapter 7: Offers a full discharge of qualifying debts, including some types of unsecured debts.
• Chapter 13: Provides a partial or complete discharge after successful completion of the repayment plan.
• Chapter 7: Typically resolves within a few months.
• Chapter 13: Involves a longer process, spanning several years due to the repayment plan duration.
• Chapter 7: Involves the potential liquidation of non-exempt assets to repay creditors.
• Chapter 13: Allows individuals to retain their assets while adhering to the court-approved repayment plan.
• Chapter 7: Eligibility is determined by the “Means Test,” which evaluates income and expenses.
• Chapter 13: Offers a viable option for individuals with a regular income who can adhere to the repayment plan.

Eligibility Criteria

Eligibility criteria for discharging or modifying student loans through bankruptcy depend on various factors. Courts often consider the “Brunner test” to evaluate “undue hardship” in discharging student loans. This test assesses the debtor’s ability to maintain a minimal standard of living while repaying the loans, the persistence of financial hardship, and good faith efforts to repay.

At Hilltop Law Firm, we employ strategic approaches to help clients seek relief from student loan debt. We work within the legal framework to present compelling cases that meet the eligibility criteria, aiming to alleviate the financial burden on individuals pursuing higher education.

Seize Your Financial Freedom with Hilltop Law Firm

If you are struggling with unmanageable student loan debt and seeking a path to financial stability, Hilltop Law Firm is here to help. When you partner with our Phoenix legal team, you can say hello to a new future, one where student loan debt doesn’t hinder your pursuit of success.

Give us a call at (602) 466-9631 today to learn more.