Student Loan Bankruptcy

Hi cettlin1279. Tracy's reply is 100% correct.  There is a very narrow exception and it is reserved for those filing bankruptcy who have little likelihood (due to dire circumstances) of ever repaying their student loans. In such cases the court applies a test for the filer to prove there is an undue hardship. This also requires another step in the bankruptcy process that necessitates filing a petition within the bankruptcy court. 

Each judicial jurisdiction is different in the process, but the filer must prove the following: (1) you cannot maintain, based on current income and expenses, a “minimal” standard of living for yourself and your dependents if forced to repay the student loans; (2) additional circumstances exist indicating that this is likely to persist for a much of the repayment period of the student loans (disability is one such circumstance); and (3) you made good faith efforts to repay the loans.  See what I mean?  It is a narrow exception. I wanted to post this information so you and readers are aware there is a possibility to address student loans in bankruptcy albeit a narrow opportunity.

Currently there are efforts to make changes in the bankruptcy code for student loans but changes to the federal bankruptcy code are not speedy and it is not anticipated that there will be change in the near future.

Fortunately it doesn't sound like you have suffered such a change in your circumstance to qualify for discharging your student loan debt in bankruptcy, nevertheless it doesn't change the fact the student loans are sitting out there and causing you concern.  Let's hope there is some relief in the future.

Carolyn