Bankruptcy: Are Student Loans Dischargeable?

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Are Student Loans Dischargeable in Bankruptcy?

Student loans are not dischargeable in bankruptcy as a general rule. There are some circumstances where you can get a discharge if you have an extreme hardship. It’s different jurisdiction to jurisdiction. Depends on the state in which you file. But currently there is a problem with student loan debt. There’s just a lot of it. It is very common for me to talk to a client that has $30,000 of unpaid credit card debt and we go through their whole situation and then they mention, “Oh yeah. But I also have $60,000 dollars of student loan debt” and there is absolutely nothing we can do with that in the Chapter 7 bankruptcy, in most cases, or a Chapter 13 either way. Again every situation is different. The law is evolving, and there are hardship dismissals and discharges and also there are administrative remedies for student loans so so don’t think all hope is lost. But yeah as a general rule, there is a problem with student loan debt. There’s too much of it and unfortunately there’s just you know other than just getting the automatic stay getting a reprieve from it, there’s not a lot we can do with it in bankruptcy, but I expect the laws to start changing, so stay tuned on that.
Bankruptcy attorney David Shuster