If you are drowning in student loan payments, you may be looking to bankruptcy as a way out. While it can help, be aware that most forms of student loan debt do not get discharged.

That sounds discouraging, so take a look at how bankruptcy might be able to help anyway.

Your other debts

Often, people do not deal with just student loan debt. For example, someone going through a Chapter 7 bankruptcy could get medical bills, credit card bills and more discharged. That means potentially more leeway to pay down these student loans.

In a Chapter 13 bankruptcy, parts of your debts are repaid over three to five years, giving you potentially more space in which to tackle student loan payments.

Student loan debts

In some cases, your student loan debts could be wiped out, for example, if paying them back would impose an undue hardship on you, perhaps rendering you homeless and unable to pay for food after you have become disabled. It could be that instead of a total discharge, the loans would get restructured or changed so that you pay only a portion back. That is for federal loans, anyway.

Private student loans are even harder to get discharged in bankruptcy. Moreover, someone such as your parent may have co-signed them. So, your parent is responsible for these payments too. In fact, maybe you are one of these parents. You are exploring bankruptcy because you co-signed private loans to get your child through college. Now your child cannot find a job and you are struggling to make these payments. Before deciding you have no choice but to repay the loans at any cost, it may help to meet with an attorney.


Why are student loans so problematic to get discharged? It is hard to say. Some people believe that it is because people will go to college, get their degrees and immediately file for bankruptcy if the option is available. The evidence does not tend to support this, and other federal debts such as Small Business Administration loans can be discharged in bankruptcy.