Can you file bankruptcy to discharge student loan debt?

Can you file bankruptcy to discharge student loan debt? This common question has a two-part answer. The answer to the direct question of whether or not a person can list a student loan lender as a creditor in a bankruptcy case is "yes." The lender can, and should, be listed as a creditor, but whether the debt can actually be discharged is another discussion. The answer to this question is "possibly," but it may require additional work.

When any portion of a student loan is considered to be government insured, or in other words to be a federal student loan, a separate proceeding known as an adversary proceeding must be filed. If the student loan is solely issued by a private lender, such as a bank, then it may be discharged within an original bankruptcy filing.

The purpose of an adversary proceeding is to ask the court to take a look at a single debt in order to determine undue hardship on the debtor if repayment is required. Even if such hardship can be proven, there are still several options a bankruptcy judge can consider to determine repayment. The debt may be completely forgiven and the debtor never be required to make further payment. The debt may be partially forgiven, and the debtor required to pay less than the original balance at a payment rate he or she can afford. Finally, the debt may not be forgiven at all, but the lender ordered to calculate a lower interest rate and offer affordable payments. In addition, a judge may decide to do none of those and order a debtor to work directly with the lender regarding affordable payment terms.

Student loan debt forgiveness is rare. However, if your circumstances are in such a dire state that you absolutely cannot make any payment and be able to maintain a reasonable standard of living, there are options.

No Comments

Leave a comment
Comment Information

Recent Blog Articles

Committed to Providing Quality, Efficient, Cost Effective Legal Representation and Advice Questions? Contact Us Today
Email Us For A Response

Contact our firm today

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Our Office

  • 617-471-5700
  • 617-770-9031

Levin and Levin, LLP
875 Southern Artery
Quincy, MA 02169

Phone: 617-471-5700
Quincy Law Office Map