Can You Discharge Student Loan Debt in Bankruptcy Court?
In today’s dismal financial climate, almost everyone fantasizes about filing for bankruptcy protections. Even though bankruptcy filings have increased since financial long COVID set in, and even though more than 90 percent of bankruptcy cases that make it to the filing stage result in the discharge of some debts, only a fraction of the people who consider filing for bankruptcy each year go through with it. Sometimes the reason is simple inertia; filing for bankruptcy feels like so much work when you are already overwhelmed with debts that keep getting bigger even as you make payments every month. In other cases, the obstacles to filing for bankruptcy are financial; every year, you tell yourself that you will spend your tax refund on bankruptcy filing fees, but by the time you receive your refund, there is another financial emergency that you have to spend it on. Meanwhile, some people decide against filing for bankruptcy because they think that the debt relief they will get from it will not be enough to justify the hit that their credit score will take. One of the most persistent myths about bankruptcy is that you cannot discharge student loan debt in bankruptcy court. In fact, most applicants who try to discharge their student loan debt in bankruptcy court can do so successfully. If you are considering filing for bankruptcy, and student loan debt is a major source of your financial woes, contact a Jupiter chapter 7 bankruptcy lawyer.
Non-Dischargeable Student Loan Debt Is an Outdated Stereotype
Not all debts are dischargeable in bankruptcy, and most people who are broke enough to have read the bankruptcy court’s web page can recite the kinds of debt you can discharge in bankruptcy court and the ones you can’t. Credit card debt, medical bills, and unsecured personal loans are a yes, but alimony, child support, and criminal fines are a no. Most people will probably tell you that student loans are also a no, but that is no longer true. A new law that went into effect in 2022 made it easier to discharge student loan debt in bankruptcy court. You must fill out a 15-page attestation form detailing the impossibility of repaying your student loan debt and how it is harming your finances.
Who Is Applying to Discharge Student Loan Debt in Bankruptcy Court, and How Often Do They Succeed?
In the first year after the new student loan discharge law came into effect, 652 people applied to discharge their student loan debt in bankruptcy court, and in 87 percent of those cases, the bankruptcy court discharged the debt. Nearly three quarters of the applicants who discharged their student debt were women, and they ranged in age from their 20s to their 70s.
Work With a Debt Lawyer About Discharging Student Loan Debts in Bankruptcy Court
A South Florida debt lawyer can help you file for chapter 7 or chapter 13 bankruptcy protection and discharge student loan debts that you cannot repay. Contact Nowack & Olson, PLLC in Jupiter, Florida to discuss your case.
Source:
cnbc.com/2025/12/29/bankruptcy-student-loan-borrowers.html
