There are over 44 million young adults in the United States who currently have student loan debt. Those 44 million people owe a combined total of $1.52 trillion, with the average borrowing being $37,000 in debt by the time they graduate. Student loan debt is a rising issue, especially since many have trouble making their payments. One of the most searched questions online is, “Can I discharge my student loans in bankruptcy?” In short, no, you usually cannot, but as with many things, there are a few exceptions to that rule.

The Brunner Test

In 1998, a law was passed that stated you could not discharge student debt unless you could prove that repaying that debt would cause you undue hardship. In 2005, that law was extended to all types of student debt, including private student loans.

Nearly 800,000 Americans file for bankruptcy each year, while millions more struggle with the decision filing. Often, those weighing the decision to file are doing so under the pressure of constant collection calls, the stress of impending foreclosure or repossession, and without all of the information necessary to make an informed decision. Let us help alleviate some of those fears:

Concern 1: My credit will be ruined.

While it is true that you will experience a decline in your credit score initially, also consider the impact late payments have on your credit score. While it may not be an immediate dramatic decline, the slow loss of credit from delinquency can be more harmful than bankruptcy.

Although it is a decision that should not be taken lightly, bankruptcy is not the “end of the world” even though it can feel like it while you are busy deciding whether or not to file. With a constant and unyielding dark cloud looming over your head of unpaid debt - a detail the incessant calls from creditors will never let you forget - it may seem like there is no light at the end of the tunnel. What many consumers fail to realize is bankruptcy is that silver lining for which they have been searching, rather than an admission of defeat. For most, bankruptcy is often the beginning of a new chapter of life.

You Will Reestablish Credit

Although bankruptcy does appear on a credit report for seven to 10 years, dependant on the chapter filed, it does not mean that lenders will refuse to work with you or your spouse. Most people who file for bankruptcy can apply for a mortgage in as little as one year, so long as they work diligently to prove their picture of financial reliability.

Although much of the United States seems to have recovered from the Global Financial Crisis, thousands of Americans still declare bankruptcy every year. Although many are familiar with the general implications of bankruptcy, few first-time filers understand the intricate laws and how they relate to their particular case.

To shed some light on this complex legal field, here are four common chapter 7 bankruptcy FAQs:

What Makes Chapter 7 Unique?

If you don't have money to “treat yourself,” then don’t, and while you’re at it, turn off your lights to save on electricity. It sounds simple, but sometimes unexpected expenses pop out and as much as you cut back, there never seems to be enough money to cover everything that you need. Sometimes bankruptcy is your only option. On average, an American household with at least one credit card has a credit card debt of almost $16,000.

CNN Money offers the following tips and tricks about debt and spending to help you avoid bankruptcy:

• Some debt is good: Taking out loans for big investments like houses and college is okay, but it is still important to only take out as much as you can pay back. Also be sure to compare interest rates before choosing a loaner.
• Some debts are bad: If you consume items quickly, do not use your credit card to pay for them; these items include food and vacations. If you cannot pay off expenses that continue to build up each month, you are likely to dig yourself into a hole too deep to easily crawl out of. Try setting money aside for these items prior to the expense, so when the time comes, you have the funds ready to pay your bill.
• Control your spending: Keep track of what you spend your money on each month so you can determine what to cut back on. Twenty dollars here and there adds up more quickly than you might think.
• Pay off debts with the highest rates first: If you have a higher interest rate on one debt than another, get rid of that debt first. You will be better off letting a lower-rate debt sit and collect interest than having a high-interest debt go unpaid.
• Avoid Minimums: Try to pay more than the minimum every time you pay your credit card bill, after a payment or two, you will just barely be covering the interest that is accumulating.
• Be cautious of where you borrow: Borrowing against your 401(k) or home may be convenient, but it could lead to losing your home or not reaching your retirement investment goals.
• Prepare for the unexpected: You never know when something will go wrong. Try to maintain a cushion of three to six months-worth of living expenses in an emergency fund. This can be used for medical procedures, broken appliances, or car repairs.
• Don’t rush paying your mortgage: If you have other debt, don’t put all your money into your mortgage payment. Usually mortgages have lower interest rates than other debts. You may also deduct the interest payments on the first $1 million of your mortgage loan.
• Do not wait to get help: If you cannot handle your debts, get help before you get in too deep.

Debt counselors can help or you can contact a San Antonio bankruptcy attorney for assistance. If you do not think you can pay your debts, attorney Chance M. McGhee can help you in Texas bankruptcy courts today.