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Bankruptcy Discharge

Who It’s For: People who have declared Chapter 7 or Chapter 13 bankruptcy, and whose loans have been deemed an “undue hardship” by the bankruptcy court.

How to Apply: You need to file an “adversary proceeding” in bankruptcy court to request they view your loan as an undue hardship.

What Loans Qualify: Any federal student loan.

How Much?: This depends on the decision of the court. The loan could be fully discharged, partially discharged, or it could simply be placed on a different payment plan.

Anything Else I Should Know?:  It is extremely rare for this discharge to be approved. You can speak with a bankruptcy attorney familiar with student loans to see if it’s worth pursuing at all.  We have additional information about student loan bankruptcy here.