Skip to main content
(404) 685-8800 Contact Us
Student loan debt and bankruptcy The basics in Georgia Atlanta, GA

Personal Attention & Experience Since 1971 Family-Owned, Family Focused

Client Reviews

Student loan debt and bankruptcy: The basics in Georgia

College students are saddled with more debt than ever before. Indeed, total student loan debt in the U.S. is now estimated to be more than $1 trillion – making it larger than even credit card debt. On average, 2012 college graduates owed $29,400 in student loans, according to the Project on Student Debt. This is a stark increase from an average of only $18,750 in 2004.

Unfortunately, this means that many graduates are already buried in debt before they ever have a chance to enter the workforce. To make matters worse, the job market isn’t exactly booming when it comes to recent college graduates either. In fact, the Labor Department recently reported that the unemployment rate for 2013 graduates stands at 10.9 percent, which is noticeably higher than the overall unemployment rate. Even graduates lucky enough to land a job are discovering that salaries are not what they hoped. Sadly, many students are unable to ever escape the reality of debt.

Interestingly, although bankruptcy is often the top choice for those seeking a fresh financial start, many students avoid this process since student loans are one of the few debts that are not automatically dischargeable. However, before an individual outright dismisses bankruptcy as an alternative to deal with overwhelming student loan debt, he or she should first become familiar with relevant laws. Indeed, he or she may be surprised with just how helpful bankruptcy may be.

Discharging student loans in Georgia

Under the current bankruptcy code, student loans are not dischargeable during bankruptcy unless the failure to do so would result in an “undue hardship.” However, the bankruptcy code neglects to define what actually constitutes an undue hardship, which means it has been left up to the courts.

The first time this issue was addressed by the Eleventh Circuit Court of Appeals was in a 2002 case titled In re Cox. In this case, the court was tasked with reviewing a decision out of Georgia in which an individual was seeking to discharge his student loan debts. Given that the court had never previously defined “undue hardship” in this context, it looked to other jurisdictions for guidance. Ultimately, the court elected to apply a three-pronged test that required the individual to show the following factors:

  • Based on current income and expenses, the individual cannot maintain a “minimal” standard of living for himself and his dependents if required to repay the student loans;
  • Circumstances exist that indicate these difficulties are likely to persist for a significant portion of the loan’s repayment period; and
  • The individual has made good faith efforts to repay the student loans

Following the Cox decision, bankruptcy courts in Georgia have continued to apply this particular test when determining the dischargeability of student loans through bankruptcy. And, while the burden of meeting this test may be substantial, it is not impossible.

Furthermore, even if the individual in unable to discharge his student loans, bankruptcy may still be helpful. For instance, filing bankruptcy may allow a person to discharge other debts, such as those related to credits cards – thus freeing up significant funds to help pay off student loans. Additionally, bankruptcy may allow the individual to consolidate his or her debt, including student loan debt, which can result in lower monthly payments. However, each situation is different, which is why it is often best to seek the counsel of an experienced bankruptcy attorney if you want to learn what your rights and options may be.

First Free
Appointment



Disclaimer Privacy Policy

I have read the Disclaimer and Privacy Policy

Our Client Reviews

Gingold & Gingold LLC
5.0 / 5.0

Based on 28 reviews

Jack L.

They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

All C.

Mr. Gingold was recommended by an attorney I had worked with previously. I met with Ira Gingold to discuss credit issues. He went over each specific issue thoroughly. He advised me of the potential outcomes. He did all this in one meeting for a very reasonable price. When we finished I was confident in moving forward with a resolution. He definitely wants to help people take the appropriate course of action for their circumstance.

Karen B.

Dear Mr Gingold, There are so many reasons to be thankful for all you have done and will do. Anyone who has ever had unfavorable experiences with an attorney or the legal system will feel the trepidation that I experienced once I realized that my situation seemed hopeless. It was by chance and happily good luck that I decided to put my future and sanity into your hands. I was mortified at having to deal with my debts by claiming bankruptcy. I remember in our first meeting how you assured me that I was not alone and should not feel ashamed. And, anyone in this position obviously does not have money to spare and you were clear about all the costs and allowing me to pay according to my own ability to do so. You advised me in all aspects of the law, but also, you were at each meeting incredibly supportive and complementary of my personal and professional plans. Anyone else in this situation should feel blessed to have access to your expertise and support.

Lyla B.

I thought the process of filing bankruptcy was going to be a difficult one. However, Gingold & Gingold treated me with respect and dignity from the moment I walked through their door. I had the pleasure of working with Jamie. She is very responsive, professional, and knowledgeable. She took the time and listened to my every concern and handled each and every one of them to my satisfaction. My experience with filing bankruptcy under Gingold & Gingold's representation exceeded my expectations in a major way. They gave me such a peace of mind. I am very pleased with my decision of going with Gingold & Gingold to represent me when I filed Chapter 13 bankruptcy.

Julie T.

Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

Sherard W.

I cannot say enough about this law firm. From the initial consultation to our discharge, the entire office kept me updated with every step of the entire process. I came to the Gingold after a bad experience with another law firm. Ira and Jamie immediately began treating me like family through this experience. In the end, they assisted with eliminating many debts including my 2nd mortgage. I cannot say enough about the experience and knowledge that Ira brought to the table from the office visits to the court time. Thank you very much for helping me through this tough time. Thank you.

Write a review