Many people in New Jersey with debt problems are dealing with student loans taken out from private lenders that they cannot afford to pay back. Although there is a popular belief that these types of obligations cannot be discharged in bankruptcy, this is not entirely accurate. In fact, it may only take a person about 90 days to have many types of private student loans discharged in a Chapter 7 bankruptcy.
There are some factors to consider when determining whether a private student loan is eligible to be discharged in bankruptcy. For instance, certain loans that were made to a student at a trade or vocational school are usually dischargeable. This will be true in situations where the trade or vocational school was not accredited as an eligible educational institution under Title IV of the Higher Education Act.
Even if a student received private student loans from an accredited school, the loans may still be eligible for discharge in bankruptcy. If the person who received the loans was not an eligible student, the loans may not qualify for discharge protection. A student who used a portion of their student loan for expenses that were not related to their education may also be able to discharge that amount in bankruptcy.
It can be difficult for people to determine what types of student loans they can and cannot discharge in a personal bankruptcy. However, those who acquired a majority of their personal debt through student loans might benefit greatly from having those obligations discharged. An attorney may be able to help a person in this situation to prove that the student loans are covered through a bankruptcy proceeding.