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Do I Still Have To Pay Student Loans If I File Bankruptcy?

One of the most overwhelming debts to have is student loan debt. Most student loans are the largest debt a consumer has, other than their house, and the payments can be sky high. Simply put the cost of getting an education is sometimes more than the salary you are paid once your education is complete. Not only is this overwhelming, but it is also quite frustrating. In order to deal with this problem some people turn to consolidation companies and others look for jobs that provide repayment as a benefit. Still yet there are opportunities out there that forgive your student loan debt if you meet certain requirements, such as working in public service for a set time period after graduation.

One of the most common questions about student loans though is whether bankruptcy will clear them from your debt load. The quick answer is “no”, even in bankruptcy student loans are still required to be paid. That said, there are unique cases where the Court will order that the student loans do not have to be repaid. This requires showing the Court these things:

  • That repayment works a significant hardship on not only you, but also on your dependents.
  • That you have made a good faith effort to repay your student loan debt.
  • That the chances of you being able to find employment that allows repayment of even the smallest amount is highly unlikely.

This is a hard test to meet and most people do not get their student loans wiped out in bankruptcy. What bankruptcy can do for you though is eliminate other debt so that you have more disposable income each month and can put that disposable income toward your student loans. For example, in a Chapter 7 you are allowed to discharge all of your unsecured debt. This means all of those high interest rate credit card balances go away, and you can put the monthly payment that you were making to the credit card companies toward payment on your student loan. In this way bankruptcy shuffles your debt so you are in a better position to pay the things that still have to be paid. To find out more, call our office today.

For more information about bankruptcy and how your student loans are impacted when you file, contact us at We will help by coming up with solutions that work for you.

6 of 10 DATE: June 17, 2016

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