Can You Discharge a Student Loan In Chapter 7 Bankruptcy?

Student loan bankruptcy debt is very difficult to get discharged in a Chapter 7 bankruptcy.  In rare circumstances, you may be able to get your student loan debt discharged if you can show the bankruptcy court that the debt will cause undue financial hardship to you and your family.  Depending on your state law, you may have to file a separate petition for an adversary proceeding asking the court to rule on discharging the student loan debt.  Different courts use different standards to determine hardship.  The Brunner test is used to determine a minimal standard of living for the debtor in a Chapter 7 bankruptcy if the debtor is forced to pay back the student loan bankruptcy debt.  Also, the court looks to see if the hardship is likely to exist for a long period of time.  So if you can convince the court that your student loan will cause you undue hardship, then your debt will be discharged and cancelled.  You should discuss your financial situation with a bankruptcy attorney first before you file for Chapter 7 bankruptcy.  Bankruptcy is always used as a last resort.

Other Debts that are not Dischargeable in Chapter 7 Bankruptcy

 Other statutory debts that cannot be discharged in a Chapter 7 bankruptcy include: 

• Recent state, federal and municipal taxes (except that federal income taxes that are 3 years or older may be discharged)
• Spousal and child support payments
• Court fines and penalties
• Debts you incurred regarding fraud, embezzlement or from other criminal activity
• Debts caused by your willful or malicious injury to a third party
• Debts caused as a result of driving under the influence of alcohol or drugs 
• All debts that you did not list on your bankruptcy petition or that were incurred after you filed bankruptcy

Speak With a Bankruptcy Attorney

You should speak with a bankruptcy attorney if you want to have your student loan bankruptcy debt discharged. The attorney can advise you about the bankruptcy laws in your state, file the necessary documents with the court and represent you in bankruptcy court.