Student Loans

Generally, you can not discharge student loan debt in bankruptcy. In order to get a discharge you have to show extreme hardship and almost no one can do that.
But there are situations where bankruptcy can help.

Let’s say you’re in this situation: You have a lot of student loans. You’ve stopped paying a long time ago. A huge amount of interest has accumulated. There is no way you can afford the monthly payments. The student loan lender has garnished your wages. You’re having trouble surviving.

You can file a chapter 7 and discharge the unsecured debt but you are left owing the student loans. Once chapter 7 has been completed (around 3 months after we file) those enormous monthly payments on the student loans and the wage garnishment resume.

The solution may be to then file a chapter 13. If you earn more than the median your chapter 13 plan will be for 5 years. (If you make less than the median your plan will be 3 years.) During the life of the plan, we can get your monthly payments on the student loans reduced to an amount you can afford. The loans won’t be discharged but at least the monthly payments will be reduced.

Then when the plan ends you can file another chapter 13. And then another. And then another. And so on. Eventually, you will have to pay the loans unless and until Congress grants some sort of relief or you pass on.

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