How Do You File for Undue Hardship Discharge of Student Loans in New Jersey?

Excessive student loan debt is a crisis that is affecting many graduates in the United States. Many graduates are stuck with thousands or even hundreds of thousands of dollars worth of loans and unaffordable repayment plans. Fortunately, it is possible for some graduates to discharge their student loans if they can prove they possess an undue hardship. If you need assistance filing an undue hardship claim, contact an experienced New Jersey bankruptcy lawyer.

At Young, Marr, Mallis & Associates, we are prepared to provide you with the legal representation you deserve to help you manage your student loan debt. Our attorneys possess decades of combined legal experience, and we will employ that experience to represent you proudly. To schedule a free consultation to discuss your legal options, contact Young, Marr, Mallis & Associates at (609) 236-3519, or contact us online.

Applying for an Undue Hardship Loan Discharge

Before a student loan borrower can make an undue hardship claim, they must first file for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Ordinarily, many borrowers will opt to use Chapter 7 bankruptcy because it allows for certain debts to be wiped clean, like extensive credit card debt. Alternatively, Chapter 13 bankruptcy allows a debtor to reorganize their debts into a more manageable form.

Whether you choose to file Chapter 7 bankruptcy or Chapter 13 bankruptcy, you may have to consent to credit counseling to gain permission to file bankruptcy.

Once you file for bankruptcy, you must file an adversary proceeding if you wish to make an undue hardship claim. An adversary proceeding is when a debtor files a lawsuit against a creditor they owe. In this case, you would have to file a proceeding against your student loan holder, whether it is the federal government or a private entity.

It is important to seek the aid of an experienced attorney when filing for bankruptcy or an adversary proceeding to ensure that you are completely prepared for your case. Your student loan holders and other creditors could challenge your filing for bankruptcy, and if you are unprepared, it may affect your chances of receiving a student loan discharge.

Gathering Evidence for Your Undue Hardship Claim

An undue hardship claim states that a debtor cannot afford to pay their student loans because doing so would place them in a position where they could manage other essential expenses, like housing. To prove that a debtor cannot afford to pay their student loans, the debtor must provide extensive evidence that proves their claim.

One vital piece of evidence is providing your income and list of essential expenses for each month. This should include items like rent, medication, food, utility bills, credit card bills, car loans, and any similar expenses. You should also provide pay stubs from your job that indicate your income level.

Additionally, if you have a disability that may affect your ability to pay your loan, you should provide documentation for that too. For example, medical bills or documentation of hospital stays, and visits will help paint a picture of why you need an undue hardship discharge. It would also help to have letters from the physicians that diagnosed and treated you.

To prove undue hardship, you must also show that you made an honest effort to pay your student loan debt. This can be indicated by providing correspondence between you and your creditors and by submitting copies of payments that you made.

All information provided should be thorough. For example, if you spoke to a representative regarding the status of your loans, you should document their name and the exact date you spoke to that representative. Failing to provide recent and accurate information could severely harm your case.

What Happens if You Win Your Undue Hardship Case?

If you prevail in your undue hardship claim, there are multiple actions the court may take. One possibility is that the court will discharge all your student loans, and you will not have to repay any remaining amount left on your loans.

Another possibility is that a substantial amount of your loans will be discharged, and you will have to pay off the remaining balance. A third scenario is that you will be subject to pay the total balance of your student loans, but the interest rate will be significantly reduced.

Work with Our Experienced NJ Student Loan Discharge Attorneys Today

If you or a family member need assistance handling their student loan debt, contact an experienced New Jersey student loan discharge attorney. Young, Marr, Mallis & Associates understand the stress associated with owning a large amount of student loan debt, and we are here to help you find a solution to this problem. To schedule a free legal consultation, contact Young, Marr, Mallis & Associates at (609) 236-3519.

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