You have likely heard that discharging your student loan debt is impossible, even after filing for bankruptcy. However, this is not completely true.
There are some ways to have your student loans discharged, although the circumstances where this is possible are few. Learn more about this here.
How do you start the process?
To get your student loan discharged, you must file an adversary proceeding with your bankruptcy. This is to show that it will cause you undue hardship to have to repay the loans. Then, the court will consider how having to repay your student loans would impact your life and financial situation. To do this, it considers:
- If you can maintain a minimal standard of living while repaying the debt
- If the hardship would last the entire repayment period
- If you have tried to repay the debt before filing for bankruptcy
What happens if your student loans aren’t forgiven?
Once the court has reviewed your information, they will eliminate all the debt, eliminate part of it, or leave it for you to repay.
It is worth noting that even if you are not granted relief from your student loan debt, filing bankruptcy can still be beneficial. By eliminating other debts through bankruptcy means, you will have more money to put toward the student loan debt you still owe. As a result, filing for bankruptcy may help to make your student loan debt more manageable.
The adversary proceeding and Chapter 7 bankruptcy filing can work together to help you get on secure financial footing. While filing for bankruptcy may not directly eliminate your student loan debt, it’s still often beneficial to pursue. Knowing what options you have can help you with this process.