Does Bankruptcy Get Rid of Student Loan Debt?

The short answer is generally no, bankruptcy does not discharge student loan debt. However, in rare circumstances, student loans can be discharged in bankruptcy. In order to receive a discharge of student loans in bankruptcy, the debtor must show that the payment of student loan debt will impose an undue hardship on your dependents.

To establish this, the debtor must show that minimal living standards cannot be maintained on the debtor's current income and expenses. If you are thinking of using bankruptcy to obtain relief from your student loans, it's best to speak to a local bankruptcy attorney regarding your case. A bankruptcy attorney will be able to advise you of the likelihood that a court will grant this request from relief from student loans by analyzing your financial circumstances and the magnitude of your student loan payment. Learn more about public service loan forgiveness, go here. 

Please also keep in mind that in order to proceed with this request for relief, it is not automatically a part of the bankruptcy petition. An additional proceeding must be filed. This proceeding is called an adversary proceeding and the purpose of this proceeding is to inform the holder of the student loan debt that you are seeking relief from your student loan obligations. They will then be given an opportunity to contest the matter and argue before the court that repayment on the student loans will not cause an undue hardship or burden.

Be prepared to discuss these issues with your bankruptcy counsel. Before you meet with your attorney, it's a good idea to itemize your monthly income and expenses so you can clearly establish that repayment of your student loans creates an undue hardship on your dependents.

You should also keep in mind that you can use a Chapter 13 bankruptcy petition to restructure the repayment of your student loans. A Chapter 13 allows a debtor to propose a repayment plan that must be approved by the Court. If you are unable to pay the entire student loan, you can propose reduced student loan payments through your Chapter 13 plan.

To make student debt go away, the best option would be to apply for student debt loan forgiveness. After application, make sure you have a clear confirmation from a representative from your loan servicer that your application is under review. Once you receive this confirmation, continue to call on a weekly basis to check the status of your application. Please view this site for further details.