Consumer

What is bankruptcy?

Bankruptcy allows debtors who cannot pay their bills to get a fresh financial start by either eliminating debts or reorganizing their debts for repayment. Federal law provides the right to file for bankruptcy protection and bankruptcy court handles all bankruptcy cases. When debtors file for bankruptcy, the law prevents their creditors from seeking to collect debts until the court or trustee administers the bankruptcy estate.

How does bankruptcy work?

Generally, an individual debtor filing for bankruptcy can either file under Chapter 7 or Chapter 13 of the Bankruptcy code. Chapter 7 allows you to eliminate most, if not all, of your unsecured consumer debt. This includes credit card debt, medical bills, past due utility bills, and other unsecured loans. The debtor keeps all exempt property and any unexempt property will most likely be sold for cash for the trustee to pay to the creditors. Nevada has a list of exemptions that a debtor may use in a Chapter 7 bankruptcy filing. You must have lived in Nevada for at least 2 years to claim Nevada exemptions.

For those debtors with a house or a car to save from repossession or foreclosure, Chapter 13 may help. Chapter 13 essentially reorganizes your debts by making an affordable payment plan for the debtor to repay creditors. A trustee collects these payments from the debtor and is responsible for paying the creditors. The trustee also assures that the debtor is abiding by the terms of the payment plan. The bankruptcy is not complete, or “discharged,” until the terms of the repayment plan are met. The plans last 3 or 5 years. The benefit of a Chapter 13 filing is that the debtor is usually allowed to retain their property. However, the debtor must have a sufficient, regular source of income and agree to the terms of the repayment plan. Chapter 13 allows the debtor to cure the arrearage on any house or car payment during the plan period.

Can I file for bankruptcy?

Generally speaking, if an individual makes over the median income level, he or she will be required to file under Chapter 13. Individuals will also be required to meet a means test that will be used to measure their ability to repay their debts.

More information about filing for bankruptcy in Nevada can be found at the website for the U.S. Bankruptcy Court, District of Nevada. The Federal Courts also provide information on Bankruptcy Basics.

What property will be exempted from my bankruptcy proceeding?

Nevada Revised Statute 21.090 contains a list of all property that is exempt from the bankruptcy estate. The following is a non-comprehensive list of property that is exempt in Nevada:

One car with equity up to $15,000 (not exempt from car finance company)
Clothing
Necessary household furnishings, electronics, goods, and appliances up to $12,000.
Private libraries, works of art, jewelry, musical instruments up to $5,000.
Life insurance with annual premiums of $15,000 or less.
Pensions, IRA, 401(K) plans, etc. up to $1,000,000.
Homestead equity in debtor’s primary residence up to $605,000. If you owned your home for approximately 3 years and 4 months before filing the Petition, you may only exempt $146,450. Also, the property is not exempt from the mortgage company.
Equipment, inventory, and tools needed to carry on debtor’s business up to $10,000.
Child support and alimony received.
Security deposits paid to a landlord.
75% of earned wages if you earn more than $770 per week and 81% if you earn less
Public benefits.
Social Security Income the debtor has not spent.
Personal injury settlements up to $16,150 (pain and suffering and lost wages compensation are not capped and are exempt.)
Portion of tax return derived from the earned income tax credit.
“wild card” exemption of $10,000.

What kinds of debt cannot be discharged through bankruptcy?

There are several types of debt that generally cannot be discharged. Some examples include:

Any type of domestic support obligation such as child support or alimony or any debt included in a divorce decree
For Chapter 13 filings, certain taxes such as withholding taxes if you had employees
Debts obtained through fraud
Debts for willful and malicious injury
Debts incurred for fraud while working in a fiduciary capacity, or for embezzlement

How Nevada Legal Services Helps with Bankruptcy

Nevada Legal Services provides assistance to Nevadans interested in filing for bankruptcy in 2 ways.

In our Las Vegas Office, our intake specialists will evaluate your case to determine if a bankruptcy filing can stop harassing creditors or ease your financial burden. Our Las Vegas Office has several attorneys who can file a Chapter 7 Bankruptcy for low-income individuals. If our attorneys cannot assist you in filing bankruptcy, you may qualify for placement with a volunteer pro bono attorney at no cost to you.
In our Reno Office, we hold monthly Bankruptcy Education Seminars that anyone interested in filing for bankruptcy may attend. Following the seminar, if you still want further assistance filing the bankruptcy, we will evaluate your case to see if you might qualify for assistance with a pro bono attorney. If you are not eligible for assistance from a pro bono attorney, we also offer self help assistance in filing the bankruptcy on your own with guidance from our panel of pro bono attorneys along the way.

If you live outside of Reno, please feel free to call our pro bono program to see if we are holding a Bankruptcy Education Seminar near you or you would like to see if you qualify for pro bono placement for help filing your bankruptcy.

More information about filing for bankruptcy in Nevada can be found at the website for the U.S. Bankruptcy Court, District of Nevada. The Federal Courts also provide information on Bankruptcy Basics.

Debt Collection

Even if you have a judgment against you, your creditor must still try to garnish your wages or attach your property in order to collect the amount of the judgment. Not all property is available for the creditor to take. Some of your wages, money in a bank account, or other property is exempt from execution.

Exempt Property

Chapter 21 of the Nevada Revised Statutes lists property that is exempt from execution in Nevada. NRS 21.090. Exempt income includes:

Social Security, SSI, SSD
Public assistance such as TANF or food stamps
Unemployment benefits
75% of your disposable earnings or 81% if your disposable earnings are $770 per week or less
$10,000 in a bank account
Veteran’s Benefits, Railroad Retirement benefits, PERS (Public Employee’s Retirement System), or FERS (Federal Employee Retirement System), or CSRS (Civil Servant Retirement System)
Worker’s Compensation
Child support or alimony income
Payments received from a wrongful death judg-ment or settlement

Exempt property includes:

Up to $550,000 in equity in a homestead (Homesteading Your Home)
Jewelry, musical instruments, or other keepsakes not to exceed $5,000
Necessary household goods not to exceed $12,000
Farm equipment, trucks, stock, tools and sup-plies not to exceed $4,500
Tools, instruments, and materials of trade not to exceed $10,000
One vehicle with less than $15,000 in equity

How do I claim an exemption?

You will receive notice of a garnishment or attachment and you have 10 days to file a claim of exemption with the court. A copy of the claim must be served upon the Sheriff (or Constable), your employer (if you are being garnished) and the judgment creditor (the party trying to collect). When the claim is served, the Sheriff (or Constable) holds the property and the judgment creditor must file an objection within 8 days. The court must then hold a hearing within 7 days to determine whether you have an exemption. If no objection filed, then Sheriff or Constable must wait 9 days before returning your property.

If You Received a Summons and Complaint

If you do not believe you owe the debt or disagree with the amount, you need to file an Answer within 20 days of receiving the Summons and Complaint. The Answer must state why you do not owe the debt and any affirmative defenses you believe you have to the debt. If you believe the creditor or debt collection agency did something illegal in attempting to collect the debt, you may also want to file a counterclaim against the creditor or debt collector when you file your answer. If you do not file an answer or go to the hearing, the creditor can get a default judgment against you. A judgment remains in effect in Nevada for six years, and can be renewed forever.

If you do owe the debt, you can choose not to answer the complaint. A default judgment will be entered against you, but you will likely incur less attorney's fees than if you contested the Complaint. You may wish to contact the creditor or the creditor’s attorney directly in an attempt to negotiate a payment plan. They are not obligated to arrange payments, however, it may prevent further collection actions if payments are being made. Alternatively, you may wish to consider the various forms of relief available to you under the Bankruptcy Act. You may file a Chapter 13 Bankruptcy action to establish a wage-earner plan where in you pay your creditors on a reduced basis. You may also consider a discharge of all your debts by filing a Chapter 7 Bankruptcy. In either of these proceedings, court actions and executions of judgments are stayed while the bankruptcy action is proceeding. You should consult a private attorney if you are considering filing for bankruptcy.

Stop Collection Agenices from Calling

The Fair Debt Collection Practices Act (FDCPA) sets out the rules collection agencies must follow. For more detailed information you can also see our section below on Abusive Debt Collection Practices and How to Stop Them.

The FDCPA applies only to third party collection. It does not apply to creditors trying to collect money you owe them directly. If a debt collector is harassing you, you do have the following protections:

If a collector contacts you about a debt, you may want to talk to them at least once to find out if you can resolve the matter. If you decide after contacting the collector that you do not want the collector to contact you again, tell the collector in writing to stop contacting you. Please click here for a sample letter requesting that the debt collector stop contacting you. Sending such a letter to a debt collector does not get rid of the debt, but it should stop the contact.
You should not be contacted about your debt at any unusual time or place. Generally, any contact from the debt collector before 8:00 am or after 9:00 pm violates the FDCPA.
If your employer prohibits contact from a collec-tion agency at work, once you advise the collector they must stop all communication with you at work.
The attempts at collection cannot be threatening. The collector cannot threaten you with jail or physical harm. They also cannot threaten to tell others about your debt to embarrass you.
If you want to dispute the debt, you can notify the collector of your dispute and request written verification of the debt. This must be done within 30 days from when you received notice of the debt. The collection agency must then verify the debt and provide you with copies of the verification.

Claim Of Exemption

Abusive Debt Collection Practices and How to Stop Them

Authored By: Nevada Legal Services, Inc.

Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act, or FDCPA, is a federal consumer protection law which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect money. The FDCPA only applices to third-party debt collectors. It does not apply to original creditors - the original credit card company, the person you borrowed money from, your former landlord, etc. A debt collector is someone who regularly collects debts owed to others. The most common examples of debt collectors include: debt collection agencies, companies that purchase delinquent debts and try to collect them, lawyers who collect debts on a regular basis.

Scroll down to find out if a debt collector is engaging in abusive practices and what you might be able to do to stop them.

What types of debts are coverd?

The FDCPA covers personal, family and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, rent and your mortgage. The FDCPA does not cover debts you incurred to operate a business, tax debt, child support payments, license fee, tort judgments or shoplifting claims.

What can debt collectors do to collect debts under the FDCPA?

Debt collectors can:

gather information about your location - but there are specific rules they must follow:
- a debt collector may contact someone other than the consumer to learn information regarding the location of the consumer but the debt collector must identify him or herself, state that he or she is confirming or correcting the consumer's location information, and, only if expressly requested, identify his or her employer
- the debt collector can never state to anyone else that the consumer owes a debt
- the debt collector cannot communicate with anyone more than once unless asked to call back or to follow up on an incomplete response from a previous attempt if they debt collector reasonably believes the person now has the information
- the debt collecor cannot communicate by post card or use any language or symbol on any written communication that the information is needed to collect a debt or identify that the communication is from a debt collector
- the debt collector can also only communicate with an attorney if the consumer notifies the debt collector they are represented by an attorney
communicate with you in a reasonable manner unless you notify them otherwise in writing

What does reasonable manner mean?

Without the prior consent of the consumer given directly to the debt collector or the express permission of a court, a debt collector may not communicate with a consumer about a debt . . .

at a usual time or place or a time or place known to be inconvenient to the consumer
before 8 a.m. or after 9 p.m. (consumer’s local time)

Usual time or place or places known to be inconvenient to the consumer include:

Places such as a neighbor’s home, a hospital, or a funeral home are inconvenient or unusual places to contact a consumer about a debt.
Workplaces are inherently inconvenient places to contact many types of workers, including nurses’ aids, teachers, assembly line workers, and restaurant workers.

A consumer need not use precise legal language to inform the debt collector of the inconvenience.

Note: The FTC has notified several debt collectors that the consumer’s workplace may by its nature be an inconvenient place to receive debt collection contacts.

How can I stop a debt collector from contacting me?

If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease or stop further communication with the consumer, the debt collector shall not communicate further with the consumer about the debt, except . . .

to advise the consumer that the debt collector's further efforts are being terminated;
to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
to notify the consumer that the debt collector or creditor intends to invoke a specified remedy

“Consumer” defined . . .

In this section (FDCPA § 805), the term “consumer” includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator.

Sample letter to stop the debt collector from contacting you. Make a copy of your letter. Send the original by certified mail, and pay for a return receipt so you have documentation showing the debt collector received the letter.

What can't debt collectors do under the FDCPA?

harass or abuse you in any way
lie to you or mislead you
use unfair business practices to collect a debt

What actions constitute harassment or abuse?

A debt collector may not engage in any conduct with the purpose to harass, oppress, or abuse any person in connection with the collection of a debt, including:

Use or threaten to use violence or other criminal means to harm the physical person, reputation, or property of any person
Threats to contact third parties
Use obscene or profane language to abuse the hearer or reader
Use intimidating, belittling, insulting, or criminal language or behavior
Publish a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency
Advertise the sale of any debt to coerce the payment of a debt
Make telephone calls without disclosing the caller’s identity
Calling the consumer at his or her place of employment to collect on the debt notwithstanding warnings on prior occasions that he or she could not talk at work or calling the consumer a large number of times after the consumer told the collector that the debt was paid and requested the debt collector to stop calling
Cause a telephone to ring or engage any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person

. . . So how many is too many phone calls?

The point at which telephone calls become so frequent as to violate FDCPA § 806 depends on the circumstances.

A debt collector is entitled to call the debtor more than once, unless the next call is immediately after the consumer demands no more calls and hangs up.
The FTC has suggested that a call on the day before and the day after a promised payment was due would not violate the FDCPA, but six phone calls in a hour would.

Keeping a Collection Call Log is crucial to preserve evidence of harassment or abuse by a debt collector. You will want to have the Collection Call Log available at all times so you can immediately record the: date, time, length of call, debt collector’s name, agency, and call-back number, type of call a (voicemail, live conversation, dial and hang up), and the content of the communication. Remember to keep all voicemails and written communication received from a debt collector.

What are false or misleading representations?

A debt collector may not use any false, deceptive, or misleading representations or means in connection with the collection of any debt, such as:

What are unfair or deceptive practices?

The FDCPA states that a debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.

Collect any interest, fee, charge, or expense on top of the amount you owe (the principle obligation) unless it is expressly authorized in the contract that created the debt or by state law
Examples of potentially illegal charges include:
- Noncontractural collection charges;
- Interest charges;
- Dishonored check charges;
- Service charges;
- Attorney fees;
- Litigation fees;
- Collection agency fees;
- Late fees;
- Prepayment fees;
- Charges under dispute;
- Taxes.
Accept a check or other payment instrument that has been posted dated by more than five days unless the debt collector 1) notifies the consumer in writing that he or she intends to deposit the payment and 2) sends the written notification 10-3 days before the debt collector makes the deposit
Deposit or threaten to deposit a post-dated check or other post-dated payment instrument early
Conceal how he or she is contacting a consumer and then charge the consumer for the communication

Examples: fees from collect telephone calls or telegrams

Contact a consumer by post card
Take or threaten to take a consumer’s property unless it can be done legally.

This means that if . . .

there is no present right to possession of the property claimed through an enforceable security interest;
there is no present intention to take the property; or
the property is exempt by law

. . . the debt collector can’t take or threaten to take it.

Use any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer. A debt collector may use his business name if the name does not indicate that he or she is in the debt collection business.
Threatening to contact unobligated third parties;
Threatening to advise a creditor to sue, when such counseling by a collector constituted unauthorized practice of law under state law;
Serving a consumer with a summons for a judgment debtor examination to be conducted in an improper venue under the FDCPA;
Dunning letters, sent by a collector on law office stationary but actually from an in-house attorney, or signed by an outside attorney or other collector who had know knowledge of the debt.

What if the debt collector has violated the FDCPA?

Any debt collector who fails to comply with any provision of the FDCPA is liable to the consumer against whom the violation occurred in an amount equal to the sum of . . .

any actual damage sustained as a result of the violation;
in the case of any action by an individual, additional damages as the court may allow, but not exceeding $1,000

If the lawsuit is successful, the debt collector will be liable for the costs of the lawsuit and reasonable attorney's fees.

Note: If the court finds that a lawsuit was brought in bad faith and for the purpose of harassment, the court may award the defendant debt collector reasonable attorney's fees and costs.

In determining the amount of liability of a debt collector, the court shall consider, among other relevant factors —

the frequency and persistence of noncompliance by the debt collector,
the nature of such noncompliance,
and the extent to which such noncompliance was intentional

Intent of the Debt Collector

A debt collector may not be held liable if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error.

Statute of Limitations

An action to enforce any liability created by the FDCPA may be brought in any appropriate court of competent jurisdiction within one year from the date on which the violation occurs.

The Consumer Standard

The courts apply an objective “least sophisticated” or “unsophisticated” consumer standard to analyze the protections of the FDCPA. Proof of actual deception of the consumer bringing the FDCPA claim is neither required nor relevant to the debt collector’s liability.

Where can I report an FDCPA violation?

The FTC advises consumers to report any problems you have with a debt collector to your state Attorney General’s office, the Federal Trade Commission, and the Consumer Financial Protection Bureau.

Nevada Attorney General

Attorney General’s Bureau of Consumer Protection Hotline: 702-486-3132

FTC Headquarters

Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Telephone: (202) 326-2222

Consumer Financial Protection Bureau

P.O. Box 4503
Iowa City, Iowa 52244
Telephone: (855) 411-CFPB (2372)

How do I dispute a debt?

The most basic right a consumer has is to ask the debt collector to validate the debt. The debt collector will usually notify you of the debt in the initial communication to you about the debt. If not, then within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector must send the consumer a written notice containing . . .

the amount of the debt;
the name of the creditor to whom the debt is owed;
a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and mail it to the consumer; and
a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

Sample Debt Validation Letter

If you dispute the debt - meaning you don't believe it is your debt or you don't owe the money the debt collector is attempting to collect - you may send a written notice to the debt collector disputing the debt. The written notice disputing the debt should be sent within 30 days of receipt of the notice of the debt from the debt collector. If the consumer notifies the debt collector in writing within the 30 day period that the debt, or any portion of the debt, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector must cease collection of the debt, or any disputed portion, until the debt collector obtains verification of the debt or a copy of the judgment, or the name and address of the original creditor, and a copy of the verification or judgment, or name and address of the original creditor, is mailed to the consumer.

The failure of a consumer to dispute the validity of a debt may not be construed by any court as an admission of liability of the debt by the consumer.

Legal Pleadings: A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication of notice of the debt. This means that you must first receive the initial communication from the debt collector advising of your right to dispute or validate the debt.

Additionally, the debt collector can only sue the consumer in the county where the real property is located if the debt involves real property, the county where the consumer signed the contract, or the county in which the consumer resides.

A note about multiple debts: If any consumer owes multiple debts and makes any single payment to any debt collector, the debt collector must apply the payment in accordance with the consumer's directions.

The above-stated provision, FDCPA § 810, gives a consumer the right to decide how to allocate payments among multiple debts being collected by the same collector. A consumer in this situation may choose to give preference, for example, to a secured debt over an unsecured debt. However, there is no provision that mandates debt collectors to provide consumers with notice of this right.

Stop Calling Letter

Homesteading Your Home

Information on how to homestead your home
Why do I need to homestead?

If someone sues you and gets a judgment (judgment creditor), your home could be sold to pay off the judgment. This could happen if you fail to pay a credit card or get into an expensive traffic accident. The judgment creditor can seize your home and sell it to pay off the judgment. Filing a homestead declaration stops this from happening.

What is a homestead?

Nevada homestead law protects your home from most creditors. By filing a declaration of homestead, you will protect up to $550,000 in equity in your residence home. A homestead protects your home from creditors.

Do I qualify?

You can file a homestead on the home, condominium, or mobile home that you live in. You must own the land upon which your home sits or own the condominium.

If you do not own the land, only the structure on the land, you do not need to homestead. Nevada law still protects up to $550,000 in equity. NRS 21.090(1)(m).

Allodial Title?

Allodial Title is no longer available in Nevada. If you have established Allodial Title, you must have done so prior to June 13, 2005. For further information, contact an attorney.

How much does a homestead protect?

A homestead protects up to $550,000 in equity in your residence home. You can still file a homestead if you have more than $550,000 in equity. In this case, the home may be sold and the $550,000, or any amount remaining after the sale and satisfaction of the debt, will be returned to you. NRS 115.050.

If the judgment is for medical bills, you do NOT need to file a homestead and the $550,000 limit does not apply. All of your equity is protected during your lifetime, the lifetime of your spouse and until your minor child turns 18. If your child is disabled, then this exemption applies for your child’s life. A joint tenant is also included in this exemption, as long as the joint tenant was on the title when the judgment for medical bills was entered. NRS 21.095.

Does a homestead protect me from all debts?

No, the homestead will not protect you from debts used to purchase or improve your residence home. The homestead will not protect your home from unpaid bills or damages resulting from work done on your home, like landscaping and painting.

Finally, homestead does not protect your home from unpaid tax bills or Medicaid liens, HOA dues, federal taxes and other federal claims.

I have a homestead already.Do I need to re-file?

No. Even if you filed before July 1, 2007, when the exemption amount was only $350,000, Nevada law amends your homestead to include the greater amount of $550,000. NRS 115.010(6).

Although Nevada law allows a homestead to continue after the death of owner, it is a good idea to re-file a homestead whenever:

You or your spouse die;
You divorce your spouse;
You get married.

Record the form:

You record your Declaration of Homestead bytaking or mailing the form to the county recorder's office in the county in which you live.

You must pay a recording fee. Contact your local recorder’s office for fee information. The recorder’s office will record your Declaration of Homestead and return the form to you. Recording the homestead is constructive notice to any judgment creditor that up to $550,000 in equity is protected.

Homesteading Your Home Brochure

Homestead Fact Sheet

Fact sheet put out by the Nevada Legislature with helpful links to more information and Homestead Forms in Nevada.

Fact Sheet

Identity Theft

Identity Theft - FTC Informational Brochure

FTCs informational handout regarding identity theft and what can you do if you experience it. Also contains links to an interactive identity theft tutorial from the FTC.

Identity Theft

The Fair Credit Reporting Act and FACTA (Fair and Accurate Credit Transactions Act) provide the protection of fraud alert and credit freeze. The Fraud Alert notifies the big three credit reporting agencies to place a fraud alert on your file for 90 days. This period of time can be increased to 7 years. FACTA also requires the credit reporting agencies to provide a free credit report each year and this service is found at

www.annualcreditreport.com

If you are the victim of Identity Theft, you should file a complaint with the Federal Trade Commission (link above). But you should also notify local law enforcement and the credit bureaus.

Student Loans

Low-Income Student Loans in Nevada: Options for Repayment

Nevada has an average student debt of $23,220 in 2015 with 47% of those in college with loans to pay (USA Today, 2017). If you are a low-income student who currently faces loan repayment problems, there are several options open for you including deferment, forbearance, debt consolidation and even debt discharge by filing bankruptcy.

Paying Back Student Loans: Options for Low-Income Graduates

If unable to pay back debts, the first step to do is to establish whether you have federal or private loans. Use the National Student Loan Data System to check all fed loans made to you. For private loans, you need to go directly to the financing institution or check salliemae.org. Having completed all your paperwork and knowing how much you owe to your creditors, you can have the option of going to deferment or forbearance after the automatic grace period of 6 months is up. Note that although these options are available to you, studying the ramifications of each solution should be done with great care as both options mean that interest still accrues on your loan.

In cases where you cannot afford to pay your student loans at all, you can opt for debt consolidation, loan cancellation or forgiveness. Deaths, permanent total disability, military or public service, and teaching low-income students for at least 5 years are some conditions that are eligible for debt forgiveness.

Filing for bankruptcy, although difficult to obtain, is also possible. Your lawyer can help explain the details of how to prove an undue hardship for filing insolvency. The court must establish whether you can maintain a minimum standard of living if you pay back loans (Brunner test). You must also show good faith to repay loans and that your financial state persists for the duration of the loan.