Student Loans Discharged Due to Bankruptcy
To Be Eligible …
In rare cases, borrowers may be eligible to have their student loans discharged due to bankruptcy. You will likely need to prove to a bankruptcy judge that repaying your loans would be an undue hardship. This standard generally requires you to show that there is no likelihood of any future ability to repay. As a result, it can be difficult to discharge federal student loans through bankruptcy—but not impossible.
If you are eligible for this type of discharge, you can have up to 100% of your loan’s amount forgiven. You may also regain eligibility for federal student aid if you previously lost it.
Loans That Qualify
- Stafford loans
- Grad PLUS loans
- Parent PLUS loans
- Consolidation loans
- Perkins loans
You must apply for this type of discharge in an adversary proceeding in bankruptcy court, so consult a qualified bankruptcy attorney first. To learn how to go about doing this, look here.