Can you file for bankruptcy to get rid of student loans?

While you can file for bankruptcy to get rid of your student loans, it’s a lot harder than filing for bankruptcy for other types of debt. That’s because you have to prove your student loans cause you undue hardship under current bankruptcy law, adding another step to your case.

How often do people get their student loans discharged?

According to one study, only 0.1% of student loan borrowers declaring bankruptcy even try to get their student loans discharged. Of that fraction, 40% succeed.

How can I get rid of my student loans?

Step 1: Check if your loans might qualify as an undue hardship. Step 2: Meet with a bankruptcy lawyer to discuss your case. Step 3: File for Chapter 7 or Chapter 13 bankruptcy. Step 4: Start an adversary proceeding. Step 1: Check if your loans might qualify as an undue hardship.

What happens to my student loans if I file for bankruptcy?

If you have Federal student loans (FSL), nothing really happens during the bankruptcy. Pursuant to the Higher Education Act, FSLs are placed into what I call, “bankruptcy forbearance”. All collection activity must stop. No monthly statements, no calls, and no payments are due.

How are student loans treated in bankruptcy?

Student Loans Are Treated As Nonpriority Unsecured Debts in Chapter 13 Bankruptcy. In Chapter 13 bankruptcy, student loans are treated as nonpriority unsecured debts just like credit cards and medical bills. This means that you are not required to pay them off in full through your Chapter 13 repayment plan.

Is bankruptcy the answer to student loan debt?

Turns Out Bankruptcy Can Wipe Out Student Loan Debt After All Many Americans who get overwhelmed by student loan debt are told student debt can’t be erased through bankruptcy. Now more judges and lawyers say that’s a myth and bankruptcy can help.

What exactly is a student loan in bankruptcy?

A student loan is one made for educational purposes, including both federal loans and most private educational loans. Student loans are not ordinarily discharged in bankruptcy. Student Loan: Definition and Resources – North Carolina Bankruptcy Glossary