How You Can Discharge Your Student Loans in Bankruptcy

How can you discharge your federal student loans in bankruptcy? The process has become easier than ever before, and one of the experienced West Palm Beach bankruptcy lawyers at our firm is here to help you. You might have heard that student loan debt cannot be discharged, which we want to make clear is a common misconception. As such, you might have avoided the topic in the past, and you might have incorrectly assumed that it makes more sense to suffer underneath the burden of educational debt than to seek a discharge in a consumer bankruptcy case. Or, alternatively, you might be aware that there is a new process for handling the discharge of student loan debt in bankruptcy cases, and you may be feeling more hopeful.

The advocates at our firm have years of experience assisting individuals with educational debt, and we can tell you more about how you can discharge your student loans in bankruptcy.

You Can Discharge Student Loans in Chapter 7 and Chapter 13 Bankruptcy Cases 

Student loans can be discharged in both Chapter 7 and Chapter 13 individual bankruptcy cases. They will be discharged in approximately four to six months in Chapter 7 cases and approximately three to five years in Chapter 13 cases.

You Can Discharge Student Loans Much More Easily Than You Could Previously 

Even though it has long been possible to discharge student loans in bankruptcy, education debt is listed as an “exception to discharge” in the US Bankruptcy Code, and as a result, debtors have had to go through extra steps to prove that their loans should be discharged. While the general requirement for proving that your case constitutes an exception to that “exception to discharge,” the overall process has now been simplified significantly. Here are the steps you will now take to ask the court to discharge your student loans in bankruptcy, all with the help of your bankruptcy lawyer:

• File your bankruptcy petition;
• File an adversary proceeding (which is like a lawsuit that occurs in conjunction with your bankruptcy case);
• Fill out an “attestation form” and submit it;
• Department of Justice Attorneys will review your attestation form to determine whether your circumstances mean that your student loans should be discharged fully or partially; and
• Department of Justice Attorneys will make a recommendation concerning the discharge of your student loans to the bankruptcy judge.

How will the Department of Justice Attorneys make a determination? In short, they will be looking to see whether requiring you to continue paying your student loans would impose an undue hardship on you. To make that determination, they will be analyzing the information in your attestation form to determine your current ability to pay your student loans, future ability to pay your student loans, and attempts to pay your student loans in the past or to avoid delinquency through forbearances, for example.

Contact a West Palm Beach Bankruptcy Attorney Today 

Discharging student loans in bankruptcy is possible, and our firm knows how important it is to take every necessary step to ensure that you no longer have to grapple with student loan debt. One of our experienced West Palm Beach bankruptcy attorneys at Kelley, Fulton, Kaplan & Eller can speak with you today about the new process for having student loan debt discharged in bankruptcy, and we can learn more about the specifics of your situation.

Sources:

law.cornell.edu/uscode/text/11

justice.gov/d9/pages/attachments/2022/11/17/student_loan_discharge_guidance_-_fact_sheet_0.pdf