The nation’s economy exceeded expectations by adding 209,000 new jobs last month. Analysts believed that 183,000 jobs would be created. The additional positions are indicative of an improving economy.

This may bode well for people with student loan debt. While out of work, most people defer and forbear their loans as long as possible.  Others are forced to consider bankruptcy as a way to make ends meet, and to be free of troublesome student loan debt. 

Unfortunately, bankruptcy may not offer sufficient relief, as most student loans fall under what is called “non-dischargeable debt.” Essentially, the legal duty to pay this type of debt may not be relinquished unless a borrower shows that paying it would create an undue hardship. This is especially applicable to federally backed student loans, since they are subsidized by taxpayer money.

In order to meet the undue hardship standard, a borrower must show that he or she cannot maintain a minimum standard of living while paying the loans, that their financial condition is likely to continue, and that have previously made efforts in good faith to pay the loans. Proving undue hardship is a notoriously difficult burden, and courts rarely grant discharges absent some type of physical or mental disability that prevents someone from obtaining gainful employment.

Nevertheless, bankruptcy may help eliminate other troublesome debt that may allow a debtor to resume (or even pay off) their student loans. If you have questions about bankruptcy may work in this regard, an experienced attorney can help.

The preceding is not legal advice.