Bankruptcy and Student Loans: What You Need to Know

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Are you filing for bankruptcy with the hope of getting rid of your student loans? You might not be successful in eliminating the student loan portion of your debt. Student loans can be complex when dealing with them during a bankruptcy case, so it’s essential to understand how student loans are typically handled by the courts.

Student Loans Are Typically Not Discharged

Unfortunately, student loans are typically not discharged through bankruptcy. Whether you have a government loan or a private loan, these usually are not eliminated through bankruptcy proceedings. The exception is if you can prove you have severe hardship and cannot afford the payments – even after bankruptcy. Sadly, this is a very, very hard standard to prove for most debtors. This requires working with your bankruptcy attorney, as there is a process that needs to be followed.

When Student Loans May Be Discharged

While student loans are typically not discharged, there is an exception. If you can prove the loans are an undue burden, you may be able to get the loan discharged. But, this can be difficult and requires a number of additional filings and hearings in your case (which means it costs much more than a typical bankruptcy case).

To seek undue hardship, you need to initiate an adversary proceeding without your bankruptcy case. This is a separate legal action from your bankruptcy specifically for the purposes of resolving student loan debt.

It’s essential to hire an experienced bankruptcy attorney to represent you during an adversary proceeding. They can help you gather the right financial information and documents you will need to present to the court. They can also evaluate your financial situation to determine if you qualify for undue hardship.

Alternative Methods for Repaying Student Loans

If you do not qualify for undue hardship and are not able to get your student loans discharged, there are still alternative options you can pursue to get help with your loan payments:

  • Income-driven repayment plans: Federal student loans include an income-driven repayment (IDR) program. This limits the monthly payments to a percentage of your income. It also provides forgiveness on any remaining balance after 20-25 years. You need to apply for this program at
  • Federal loan rehabilitation: If your federal student loans are in default, you can opt for federal loan rehabilitation. This requires you to make nine on-time payments at 15% of your income. If you can complete this, the default will come off of your credit report.
  • Federal Loan Consolidation: Another option if you are in default on your federal student loan is consolidation. This allows you to combine your federal loans into one loan. You need to make three on-time monthly payments or pay the consolidation loan on an income-driven repayment plan. This will stay on your credit report, but your loan will be out of default.

Let Us Help You

If you are behind in your student loan payments and looking for relief, bankruptcy might not be an option to get rid of your debt. While this can be a key way to discharge credit card debt, student loan debt is handled differently. In fact, it might not be discharged at all.  However, there are other options you can explore. Let our lawyers at The Law Offices of Alexzander C.J. Adams, P.C. help you review your options and possible outcomes. We work for you, the people, and not institutions. Contact us for a free case evaluation, or no-obligation consultation. We are dedicated to helping you overcome this small bump in the road and assisting you to get on with your life. Don’t let another day go by – call us today.


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