Are Your Nursing Student Loans Bankruptable?

Are Your Nursing Student Loans Bankruptable?

Education is the foundation of nursing excellence and nurses with bachelors, masters, or doctoral degrees are more in-demand than ever. While nurses often earn good salaries, they may also be overwhelmed by crippling student loan debt. This can cause many nurses to consider student loan bankruptcy.

Which loans can be discharged in bankruptcy?

According to student loan bankruptcy lawyer Stanley Tate, bankruptcy is a drastic action that can lead to lifelong consequences including difficulties obtaining mortgages, credit cards, or refinancing. Tate also explains that student loan bankruptcy is subject to different laws than credit card debt and filing can cost up to $10,000. Therefore, it is important for anyone considering student loan bankruptcy to explore other options. 

Since the early 1970s, lawmakers have enacted special rules that make it more difficult to discharge student loans. The National Consumer Law Center states that in order to discharge student loans in bankruptcy, the borrower must show that paying off the loan “will impose an undue hardship on you and your dependents.” 

Courts may use different standards of undue hardships. The Student Loan Borrower Assistance explains that many courts use the Brunner test, which has two requirements. The first is that the debtor and his or her dependents cannot maintain a minimal standard of living if they are forced to repay the loans. Second, the debtor must prove that the hardship will persist for a significant portion of the loan. Unfortunately, the criteria for undue hardships can be subjective and might vary from state to state.

What are the alternatives to managing student loans without filing bankruptcy?

In her article “How to File Bankruptcy on Student Loans,” Meghan Lustig suggests that those considering student loan bankruptcy  first contact their lender and inquire about the possibility of renegotiating the terms of their loan. Renegotiation may allow you to keep your loan in good standing. Lustig emphasizes the importance of working directly with your lender and avoiding the predatory third parties, who may try to lure unsuspecting consumers.

Lustig recommends  exploring four different income-driven repayment plans for Federal Student loans. If you are experiencing severe hardships such as extreme medical expenses or a change in employment, short-term deferment or forbearance may be another option.

Using Lume to help manage loans

Nurses considering student loan bankruptcy can face a unique set of challenges. Despite struggling to manage their student loan debt, competitive nursing salaries may make it more difficult for nurses to prove an undue level of hardship over a significant portion of their loans. In order to harness their financial potential, nurses need access to resources and services that provide them with alternative options to declaring student loan bankruptcy. Nurses need Lume.

Lume is a company that specifically caters to the financial needs of nurses. Lume doesn’t only employ finance experts—their staff also includes nurses who understand the challenges of nurses.

Lume provides transparency by giving nurses access to information about work environments and employment packages to help nurses boost their earning potential and job satisfaction. Plus, easy-to-use-tools allow nurses to seamlessly plan and manage their financial goals.

Lume helps nurses maximize the investment they have made in their careers, which empowers them to prosper both professionally and financially.

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Nancy White

Nancy White has been a nurse for 14 years and has worked in pediatrics, diabetic education, postpartum and lactation. She is a Type 1 Diabetic and has educated pediatric patients and their families newly diagnosed with diabetes. She served for 10 years as a board member and medical volunteer for Camp Wana Cura, an American's Diabetes Association day camp for children. Nancy currently works as a postpartum nurse and a lactation consultant (IBCLC) at a busy teaching hospital; she also serves as a clincal preceptor for lactation interns, nurses and medical residents. She has a passion for educating and working with new parents, families and healthcare professionals. Nancy serves as a board member for the San Diego Breastfeeding Coalition, working to expand breastfeeding education and access to all members of the local community. In addition to her BSN, Nancy holds a BA in literature from the University of California at Berkeley. She is married with 3 grown children and lives in San Diego, CA. When she is not working, she enjoys sailing, yoga, learning French and attempting to play several instruments with various degrees of success.

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