Expert: Norma Duenas - California Bankruptcy Attorney - 1/5/2010

Question
In 1989 I took out a student loan for approx. $6500.00 that my husband at the time agreed to pay for. Well payments stopped when we divorced. For several years I had no work income. Now that I do they are coming after me. My loan is now $30,000. I am making good faith payments of $50.00 a month but that doesn't even cover the interest so my bill keeps rising. I heard that was something called a "motion for hardship discharge." Is there such a thing? I'm willing to work with them but $30,000 is a bit high. Or is there a way I could go to court to at least get it lowered?

Answer
In a bankruptcy case you can have your student loans discharged if you can establish undue hardship. In order to discharge your student loans in bankruptcy you must bring an adversary proceeding in your bankruptcy case. If you can establish that the repayment of the student loan would result in an undue hardship to you, then the student loans can be discharged in bankruptcy. Keep in mind that it is a difficult standard to meet. The standard is usually interpreted to mean that you cant maintain an adequate standard of living and repay the loans. Outside of bankruptcy there may be several programs that can assist you with your student loans. This will depend on the type of loan (federal loan or private student loan) and through which loan program it is with. There are some income contingent repayment plans also but these may only apply if your loan is through particular programs. If you haven't already try to talk to the lender and discuss your situation.

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