Student Loan Bankruptcy | Rome, GA

Student Loan Bankruptcy in Rome, GA

student loan bankruptcy rome ga
Conquer Student Loan Challenges 

Understanding bankruptcy and its relation to student loans in Rome, Georgia, can be tricky. If you are dealing with overwhelming student loan debt, considering filing for bankruptcy might feel overwhelming, but it could also offer hope. This article is here to help you grasp the ins and outs of student loan bankruptcy in Rome, GA. 

It aims to explain the possibilities and limitations you might face when considering bankruptcy as a solution for student loan situations. Covering everything from how bankruptcy works to the specific issues tied to student loan discharge, this guide will provide clear information for Rome, GA, residents dealing with the relationship between bankruptcy and student loans.

Short Summary:

  • Bankruptcy is a legal process designed to help individuals and businesses struggling with overwhelming debt (like student loan challenges) through a court-supervised procedure.
  • Two common types for individuals are Chapter 7 (liquidation) and Chapter 13 (reorganization).
  • Student loans are financial aid for higher education costs, repaid after graduation.
  • Federal loans, which are more flexible, include Direct Subsidized/Unsubsidized, PLUS, and Perkins. Private loans vary in terms and conditions.
  • Generally, student loans are not easily dischargeable in bankruptcy. Strict federal rules emphasize exploring alternative options before considering bankruptcy.
  • Undue hardship exception allows discharge but requires proving extreme financial hardship.
  • Brunner Test evaluates basic standard of living, persistent financial hardship, and good faith efforts. Some regions consider the totality of circumstances, creating jurisdictional variations in evaluating undue hardship.
  • In Chapter 7, if unable to prove hardship, student loans must still be repaid. On the other hand, Chapter 13 offers alternatives such as debt elimination or a structured payment plan based on income.
  • In Chapter 13, despite being responsible for any remaining balance after the repayment period, this process stops creditor calls, wage garnishment, and home foreclosure threats.
  • Bankruptcy brings relief by addressing other debts, enabling a more concentrated effort on repaying student loans.

What is Bankruptcy? 

Bankruptcy is a legal process designed to help individuals and businesses struggling with overwhelming debt by providing a structured framework for resolving financial difficulties. It is governed by federal law and involves a court-supervised procedure.

Types of Bankruptcy 

There are different types of bankruptcy, but the two most common for individuals are Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy 

  • Also known as “liquidation” or straight bankruptcy.
  • Involves the sale of non-exempt assets to repay creditors.
  • Generally, the debtor is allowed to keep certain exempt property.
  • Most unsecured debts, such as credit card balances and medical bills, can be discharged.
  • Typically, the process is relatively quick, often completed within a few months.

Chapter 13 Bankruptcy 

  • Known as reorganization or wage earner’s plan.
  • Involves creating a repayment plan to pay back creditors over three to five years.
  • Allows individuals to keep their property and catch up on missed payments, such as mortgage or car loan arrears.
  • Often used by individuals with a regular income who do not qualify for Chapter 7 or want to protect non-exempt assets.

Remember that not all debts can be discharged through bankruptcy. Specific obligations, such as child support, alimony, student loans (in most cases), and certain tax debts, may not be dischargeable.

What are Student Loans?

Student loans are financial aid designed to help students pay for the costs associated with higher education, such as tuition, fees, books, and living expenses. Unlike grants or scholarships, student loans must be repaid, usually with interest, after the borrower graduates or leaves school.

Types of Student Loans

Federal Student Loans  These loans, provided by the government, are often more flexible in terms of repayment. Typically offer borrower protections and income-driven repayment plans.

Federal loans include the following:

  • Direct Subsidized Loans and Unsubsidized Loans: Direct subsidized loans are offered to undergraduate students based on financial need. The government pays the interest while the borrower is in school. On the other hand, direct unsubsidized loans are available to undergraduate and graduate students not based on financial need. Borrowers are responsible for all interest.
  •  PLUS Loans: Available to parents of dependent undergraduate students and graduate students and requires a credit check.
  • Perkins Loans: Provides low-interest federal student loans for students in undergraduate and graduate programs who have significant financial needs.

Private Student Loans – These loans are offered by private lenders such as banks and credit unions. These loans may lack the borrower benefits of federal loans. 

  • Terms and conditions vary widely, including interest rates and repayment terms.
  • Usually, credit history and income are considered during the application process.

Do Student Loans Easily Discharge in Bankruptcy?

The general rule is that student loans are not easily dischargeable in bankruptcy.

It is crucial to start by saying that getting rid of student loans through bankruptcy is usually challenging. Federal laws have strict rules about canceling educational debt, highlighting the need to look into other options for help. This part lays the foundation for understanding the basic ideas about student loans and bankruptcy. It helps people in Rome, Georgia, prepare for the challenges they might face when thinking about these money strategies.

How to Prove a Student Loan Discharge in Bankruptcy Court 

It is critical to prove that you cannot make enough money to repay your student loans For all the tests.

Undue Hardship Exception 

An exception to the general rule exists in the undue hardship provision. That requires borrowers to demonstrate extreme financial hardship, which is a condition that allows for potential discharge.


  • Brunner Test:  The primary evaluation for proving undue hardship follows the Brunner test, assessing factors such as the inability to maintain a basic standard of living, persistent financial hardship, and genuine efforts to repay loans.
    • Inability to Maintain Basic Standard of Living: The debtor cannot maintain a basic standard of living while repaying the loans.
    • Persistence of Financial Hardship: The financial difficulties are likely to persist throughout the repayment period.
    • Good Faith Efforts: The debtor has made a good faith effort to repay the loans.
  • Other Standards in Different Region
    • Totality of Circumstances: Some regions consider the totality of circumstances, examining a broader range of factors beyond the Brunner test.
    • Jurisdictional Variations: Different judicial courts may employ varying standards in evaluating undue hardship, leading to regional differences in how bankruptcy courts handle student loan discharge cases.

What Happens If I Cannot Get Rid of Student Loans Through Bankruptcy? 

In Chapter 7 bankruptcy, if you cannot prove that repaying student loans is too difficult, you still have to pay them later. However, in Chapter 13 bankruptcy, there are different choices. This bankruptcy chapter is a viable option if you struggle with other bills like medical expenses or credit card debt. 

In Chapter 13, you can eliminate these debts or set up a payment plan based on your income, making them easier to handle. While you’ll still be responsible for any remaining balance after repayment, this process stops creditor calls, wage garnishment, and home foreclosure threats. Simply put, bankruptcy provides relief by dealing with other debts, allowing more focus on repaying student loans.

Call Us and Let Us Help You Discharge Student Loans in Bankruptcy in Georgia! 

Student loan struggles can be overwhelming, especially when bankruptcy seems like the only solution. At the Law Office of Jeffrey B. Kelly, we understand the complexities and hardships you’re dealing with. If your student loan bankruptcy in Rome, GA, is not easily discharged, don’t lose hope. Our team is here and ready to guide you. 

Don’t let the burden of student loan debt overwhelm you. Take the first step towards financial relief by contacting our law firm today. Our dedicated attorneys are committed to finding solutions tailored to your unique situation, providing the support you need during this challenging time. Call us today for a free consultation, and let’s work together to pave the way to a brighter financial future. Your peace of mind is just a call away.

Aside from our main office in Rome, Georgia, we also offer bankruptcy and personal injury legal services in our other offices in Dallas, Cartersville, Dalton, Kennesaw, Marietta, and Douglasville.