Undue Hardship Exception-Repaying Student Loans

Many students with student  loan debts in Schaumburg, Chicago, Joliet and Warrenville area want to know how if it is possible to discharge student debts. Then asked this question, the experienced Schaumburg Bankruptcy attorneys at Chang and Carlin tell students that laws appear to be softening, which may enable them to discharge their student loan debts and lead a tension free life.

In the past, student debts were unforgivable regardless of the student’s financial situation. If you had student loans, they’d be with you until you paid them off. But now, it may be possible to get rid of your student loans in bankruptcy if can prove that repaying your student loans would cause an ‘undue hardship’ to you.

According to the experienced Chicago Bankruptcy lawyers at the law offices of Chang and Carlin, there are some ways to prove that:

The Brunner’s test

Some courts require you to take ‘the Brunner’s test’ for determining whether a student loan is dischargeable in bankruptcy based on a claim of undue hardship. One needs to prove the following things:

Poverty: That the debtor cannot maintain, based on current income and expenses, a minimal standard of living for the debtor and dependents if forced to pay off student loans.

Persistence: The additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans.

Good Faith: That the debtor has made good faith efforts to repay the loans.

Totality of circumstances test

Some courts may ask you to take-‘Totality of Circumstances Test’. Here, the court will look at all relevant factors in your case to determine if it is an undue hardship for you to repay your student loans.

How to prove undue hardship

If you want to try to discharge your student loans in bankruptcy, you must file a formal complaint with the bankruptcy court, called a Complaint to Determine Dischargeability. It is then up to you to prove to the court that payment of your loans will cause an undue hardship on you.

This student loan debt outlet is by no means fully established, as it has only prevailed in a few instances. However, if your student debt is crushing you and you meet the above criteria, it could be worth looking into with a Chicago Bankruptcy attorney. 

Free Debt and Bankruptcy Consultation

Our experienced bankruptcy lawyers in Chicago can help you determine if you can discharge your student debt and will work with you to get your finances under control. For more information on Bankruptcy law or to schedule a FREE initial bankruptcy consultation, contact Chang and Carlin, LLP today!

Disclaimer: The content provided by Chang and Carlin, LLP is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Foreclosure services, or Real Estate legal services, call our law firm at 1-866-790-8601 for a Free Legal Evaluation. Chang and Carlin, LLP serves clients in Chicago, Schaumburg, Joliet, and Warrenville.

Everything You Need To Know About Bankruptcy Preferences

Many people considering filing for bankruptcy in Schaumburg, Chicago, Joliet and Warrenville area consult Chang and Carlin LLP Law Firm to determine whether to file for bankruptcy or not. Our experienced Schaumburg Bankruptcy attorneys and attorneys in other areas of Chicago tell those people that they have the right under federal law to file for bankruptcy relief from their creditors.

The U.S. Bankruptcy Code, Section 547, permits a debtor in bankruptcy or its trustee to “avoid” (i.e., force disgorgement or repayment) transfers made within 90 days of a bankruptcy filing (one year if the transferee was an insider). The Bankruptcy Code gives the debtor and/or the bankruptcy trustee several devices to avoid payments.  Probably the most frequently used of these devices is the `bankruptcy preference’. It refers to treating certain creditors better than others shortly prior to the filing of your bankruptcy. 

 A bankruptcy preference is a transfer made shortly before the case is filed that the trustee can take back from one creditor and share with all the other creditors. The transfer must be:

      1. Of money or property in which the debtor has an interest.

      2.  Made to creditor owed money by the debtor.

      3.  More than the creditor would receive in a Chapter 7 distribution.

      4.  Made within a certain period of time. 

If the court agrees with the trustee and a payment or transfer is in fact a preference, the receiving creditor has to give back the money or property and it will be used to pay all of your creditors.

However, there are several exceptions or defences a creditor may use to stop the trustee from cancelling a payment or transfer as a preference. It's up to the creditor to prove to the bankruptcy court that one of the exceptions applies. 

Preferential payments and transfers can get complicated. Talk to your Chicago bankruptcy attorney before you make any payments to creditors to make sure you get the full benefit of the payment. You don't want a payment to backfire when the person or company you pay has to turn it over to the trustee.

Contact a Chicago Bankruptcy Lawyer at Chang and Carlin, LLP to learn more about bankruptcy preferences.  Chang and Carlin L.L.P, provides excellent legal services to assist clients with bankruptcy and non-bankruptcy alternatives to meet their financial needs.

Contact Chang and Carlin for a Free Bankruptcy Consultation Today!

If you are filing for bankruptcy in Illinois, get in touch with Chang and Carlin, LLP today for a Free Bankruptcy Consultation. We understand what you’re going through and can help you navigate the bankruptcy process with precision.

Disclaimer: The content provided by Chang and Carlin, LLP is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Foreclosure services, or Real Estate legal services, call our law firm at 1-866-790-8601 for a Free Legal Evaluation. Chang and Carlin, LLP serves clients in Chicago, Schaumburg. Joliet, and Warrenville.

Why Timing is Important in Bankruptcy Cases

Do you have problems paying your debts? Are you threatened with wage garnishment, foreclosure or repossession? If so, you may want to consider bankruptcy as a way to deal with these problems.

Many people in the Schaumburg, Chicago, Joliet and Warrenville area consult Chang and Carlin, LLP Law Firm to determine whether to file for bankruptcy or not. Our experienced Chicago Bankruptcy attorneys tell those people that they have the right under federal law to file for bankruptcy relief from their creditors. However, it can also be very important to choose the right time to file for bankruptcy relief.

Timing is a critical factor in planning a bankruptcy case filing, due to the following reasons:

a)  You should always wait as long as possible before filing bankruptcy because you can do so only once every six years. You should try to save this valuable option until you’re absolutely certain that you need it.

b)   Also, you may not need to file bankruptcy even though creditors are threatening you because you may have no non-exempt property or wages.

c)  Sometimes, it's better to file for bankruptcy immediately. Keep in mind that you must receive the required credit counseling within 180 days before your bankruptcy case is filed.

d)  In order to file a Chapter 7 Bankruptcy case, most individuals are required to take and pass the “Means Test”. For many people, means test income can change every month, so you may not qualify to file a Chapter 7 one month, but maybe you will the next month. Being able to delay filing means being able to file when you are likelier to pass the means test. With a Chicago Bankruptcy Attorney  to guide you through this process, you can be sure that your income and expenses are properly represented

e)  Certain debts, such as income taxes and cash advances, which only become dischargeable after certain amounts of time, have passed.

f)  Timing the bankruptcy filing is also critical in preserving assets in bankruptcy cases.

Contact a Chicago Bankruptcy Lawyer at the Chang and Carlin LLP Law offices to learn more about how we can help with the means test and bankruptcy in general. For an initial FREE Bankruptcy Legal Consultation, contact our Law offices in Chicago. For all your bankruptcy, foreclosure, IRS and tax issues, and real estate legal needs, Chang and Carlin, LLP will provide the necessary legal experience and personal service that you deserve.


Disclaimer: The content provided by Chang and Carlin, LLP is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Foreclosure services, or Real Estate legal services, call our law firm at 1-866-790-8601 for a Free Legal Evaluation. Chang and Carlin, LLP serves clients in Chicago, Schaumburg. Joliet, and Warrenville.

How To Choose A Bankruptcy Lawyer

Bankruptcy is a federal court process that helps individuals and firms get rid of their debts. For anybody who is in a financial crisis, the obvious solution is to look for a good bankruptcy lawyer. While there are many bankruptcy lawyers in Chicago, it can be difficult to find a good one.

Your choice of bankruptcy attorney will have considerable impact on the outcome of your case, including what debts you are able to release, what property is safeguarded from insolvency and how you are able to rebuild your finances and credit history after the bankruptcy. This makes it a very delicate decision. However you only need to pay attention to a few important pointers and you’ll likely find the right bankruptcy lawyer in Chicago.

Choosing a Chicago Bankruptcy Attorney: 7 Steps

1. Bankruptcy proceedings may be complicated and will have an impact on your future. It is well worth your time and money to ensure that the attorney you are choosing is experienced with a solid track record of success.
2. While selecting a bankruptcy lawyer, it is important to ensure that the bankruptcy lawyer works for a medium sized law firm. This is to avoid the pitfalls that might arise from hiring a one-man law firm. In such a firm, the lawyer may be over-burdened with cases and short on resources. On the other end of the spectrum, a large law firm may treat you a number, and not treat your case with the care and sensitivity you deserve due to high volumes of work.
3. Your level of comfort with the bankruptcy attorney in Chicago is an important factor. You should be able to trust your attorney and be able to communicate and interact with them effectively.
4. You are going through troubled times. An experienced lawyer will know well how to put you at ease and guide you through this time with compassion. On the other hand, you should be able to respect this person’s knowledge and experience. This is the person who will help you attain financial freedom.
5. Make sure that the lawyer offers you a Free Consultation in the law office during which you can evaluate their disposition towards you and your situation, while assessing whether their fees will fit into your already weakened finances.
6. A good Chicago bankruptcy attorney should explain the pros and cons of each step that you take in accordance with the plan of action that you both formulate.
7. The easiest and most sure-fire way of having a good experience with filing your bankruptcy is to go with a lawyer recommended by your friends or families who have used their services in the past with satisfactory results. Checking out online reviews is another good way of gauging the quality of a given attorney.

If you keep these pointers in your mind while looking for an experienced bankruptcy attorney, you can feel good about your decision. If you are looking for reputed bankruptcy lawyers in Chicago, try Chang and Carlin, LLP.