Student debt is just one of the onerous forms of debt that can result in the need for Maryland residents to file for personal bankruptcy. And according to a recent report, law students in particular are facing financial hardship.

One 26-year-old graduate of the University of Maryland School of Law filed for Chapter 7 bankruptcy protection after she could see no immediate prospects for a job. She filed for protection shortly before she graduated.

The law school graduate now lives with her mother and was recently able to get some legal contract work through a temporary employment agency, but she is struggling to keep up.

While in school, the young woman studied bankruptcy law, so she decided to represent herself in bankruptcy court. As a result, she discovered how difficult it can be to convince a court to discharge student-loan debt. Federal law does not allow courts to discharge such debt unless it can be shown that repayment would result in undue hardship for the debtor. Courts often make undue hardship difficult to prove.

According to a news report, average law-school debt went up 50 percent between 2001 and 2010. That kind of increase in debt is discouraging for potential law students, since most law school graduates don't possess the earning power to make the necessary payments in a timely manner.

Reportedly, law students on average borrow $106,000 to attend a private school or $70,000 to attend a public school. And the fact that there are so few legal jobs available has resulted in an increase in defaults.

People in the Annapolis area who are facing similar debt challenges will also want to look into the possibility of filing for Chapter 7 bankruptcy. Personal bankruptcy can often give debtors the protection and breathing room they deserve to get their finances back on track for a brighter future.

Source: Reuters, "Law grads go to court for bankruptcy protection," Leigh Jones and Moira Herbst, Feb. 3, 2012