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Chapter 7 Bankruptcy and Student Loans In Missouri | St. Louis Bankruptcy Attorney

One in two college graduates in Missouri and Illinois will leave with a diploma – along with a significant amount of student debt. In fact, the average public school college graduate will leave with $13,000 in student loans, while the average private school college graduate will face an average of $28,000 in student loans. Students attending graduate school face even greater amounts of student loan debt, with medical students leaving school with an average of $100,000 in debts just as they start off in their career.

While student loan debt can greatly affect your choices and your way of life in Missouri and Illinois, just like other types of debt, student loans usually cannot be discharged by a Chapter 7 bankruptcy. Other types of debt that usually cannot be forgiven during Chapter 7 bankruptcy include alimony, child support, debts from fraud, debts from a drunk driving charge, and debts from federal, state, and city taxes.

In rare cases, student loan debt can be discharged during a Chapter 7 bankruptcy if the person or family declaring bankruptcy can prove that the debt causes undue hardship. Proving that student loans will cause undue hardship to the filer and his or her family is difficult, as it involves convincing your bankruptcy judge that you are currently unable to pay your student loan bills at the time of bankruptcy and will continue to be unable to pay your student loan bills in the foreseeable future.

While student loan debts are usually not erased, even by Chapter 7 bankruptcy, an education is often worth the cost. Studies show that those graduating from college make considerably more than those who never pursue or finish a degree – and extra income can often be used to pay off old debts.

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