July 26th, 2011 by Reed Allmand 
More than forty-five years have passed since Title IV of the Higher Education Act which authorizes the government to issue federal student loans was passed in 1965. Many students who took advantage of the student loan program then and in the years following still find themselves mired in debt which is nearly impossible to discharge in bankruptcy. Many of those students are over 60 years old and find that student loans, taxes and other difficult to discharge debt is holding them back financially. Below are a few tips how older bankruptcy debtors can handle difficult to discharge debt.
- If you’re over 60 years old, have low-income and/or health problems work with your bankruptcy attorney to file an “undue hardship” case with the bankruptcy court. Student loans can be discharged in bankruptcy if they present an undue hardship to the debtor.
- If you are unable to win your undue hardship case in bankruptcy, you may want to apply for an “income-contingent” payment plan if you have federal student loans. If your student loans are held by a private company, contact them about a payment plan that is conducive to your situation. Many private lenders offer payment plans which are similar to the income-contingent plan offered by the government.
- Consider doing work which offers student loan forgiveness. The government has several student loan forgiveness programs for teachers, nurses and other professionals willing to work in underserved areas (or meet other criteria). Visit this site for more information on the teacher program: StudentAid.gov
- If you have outstanding taxes, but don’t have enough income to pay and maintain the basic living standards after bankruptcy, apply for “uncollectible status.” When a debtor’s tax debt is designated as “uncollectible” he/she will be free from tax collection efforts for at least a year; but sometimes more. Once your income increases you can then apply for a repayment plan with the IRS and they will take into account all of your other debts including student loan debt.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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