Bankruptcy discharges most unsecured debt. Student loans are not dischargeable, unless you file a lawsuit in the bankruptcy and prove that the debt is causing an undue burden. This may have gotten a little easier based on new guidance.
The government may be implementing a new program mandating employers to automatically deduct student loan payments from a borrower’s paycheck. Is this a good thing? Actually, it may save a debtor money in the long run.
Most Arizona bankruptcy lawyers have to give the unfortunate news that student loans are dischargeable. But the new “Pay-as-You-Earn” program may provide some relief.
A competent Arizona bankruptcy lawyer may try to discharge student loans if they constitute an undue hardship to the debtor. But this is an extremely difficult standard to prove.