Bankruptcy and Your Student Loan

Bankruptcy and Your Student Loan

Filing bankruptcy is a decision that should be made with an attorney to understand the purpose and protections that you can receive under bankruptcy rules.  Chapter 7 allows for consumer debts to be "discharged" meaning that you will no longer owe many of your debts.  Some debts that are not discharged are

  • government taxes
  • domestic support such as child support or alimony
  • criminal fines penalties
  • debts not listed on the schedules
  • reaffirmed debts
  • personal injuries caused by intoxicated driving
  • student loans. 


1. Request forgiveness, forbearance to reduce or eliminate your student loan debt directly from your lender.

There are ways to have your student loans reduced or eliminated.  Contact your lender to determine if you qualify. Typical reasons for them to forgive your debt is

  1. where you have become disabled as certified by physician and unable to engage in any substantial gainful activity and are no longer able to work in the field that you were trained that will result in death or continue for at least 5 ears;
  2. VA has determined unemployable due to service-connected disability;
  3. SSDI or SSI expected to continue for substantial period;
  4. school certified but because of a physical or mental condition, age, criminal record, or other reason you are disqualified that you were able to work in the area trained;
  5. death; or
  6. bankruptcy.


2. Bankruptcy may eliminate your student loan.

Although student loans are normally not discharged in bankruptcy, there are exceptions where you may request that the court forgive the debt. 
  • If you are forced to repay the loan, you would not be able to maintain a minimal standard of living.
  • There is evidence that this hardship will continue for a significant portion of the loan repayment period.
  • You made good-faith efforts to repay the loan before filing bankruptcy (usually this means you have been in repayment for a minimum of five years).
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