Student loan debt can create long-term financial strain, especially when combined with other obligations such as credit cards, medical bills, or personal loans. Many individuals who seek debt relief wonder if they can discharge student loan debt while in bankruptcy.
The answer is complicated. In most cases, student loans are not automatically erased when you file for bankruptcy. However, under certain circumstances, it may be possible to discharge student loan debt while in bankruptcy if you meet strict legal requirements. A knowledgeable bankruptcy attorney could help evaluate your situation and determine whether pursuing this option makes sense.
Why Student Loans Are Treated Differently in Bankruptcy
While most unsecured debts, such as credit card balances or personal loans, can often be discharged during bankruptcy, student loans are an exception. Federal law limits when courts can eliminate these obligations.
Under Title 11 United States Code § 523(a)(8), student loan debt generally cannot be discharged unless repayment would cause undue hardship. Courts typically evaluate undue hardship by reviewing several factors, including:
- Your current income and employment situation
- Your essential living expenses
- Whether your financial hardship is likely to persist
- Your past efforts to repay the loan
Because the legal threshold is high, many borrowers assume discharge is impossible. In reality, some individuals do qualify when they can demonstrate severe and ongoing financial limitations.
What Is Required To Discharge Student Loan Debt in Bankruptcy?
To attempt to discharge student loan debt during bankruptcy, you must file a separate legal action called an adversary proceeding. This process takes place within the bankruptcy case and asks the court to determine whether the hardship standard has been met. During the proceeding, both you and the lender may present evidence, such as:
- Income records and tax returns
- Documentation of living expenses
- Medical records or disability information
- Proof of attempts to repay or restructure the loans
Because these proceedings can become complex, many individuals work with a bankruptcy attorney for help in presenting their case.
Contact a Bankruptcy Attorney at Werner, Hoffman, Greig & Garcia About Discharging Student Loan Debt
While the law makes it challenging to discharge student loan debt while in bankruptcy, some individuals do qualify when they can demonstrate severe hardship. At Werner, Hoffman, Greig & Garcia, we evaluate your financial situation and explain whether pursuing a hardship discharge or other debt relief strategies may be appropriate. Contact us today to discuss your circumstances and start your path toward financial control and stability.
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About the Author
Adam Werner is a partner and practicing attorney at WHG. He specializes in personal injury cases, workers’ compensation claims, and veteran disability benefits. He routinely writes about personal injury and workers comp topics for the Werner, Hoffman, Greig & Garcia blog.
