Student loans unfortunately are usually considered nondischargeable unsecured debt, so if you choose to pursue filing for bankruptcy your student loans will not be discharged with your other debt at the end of your case. Nevertheless, one advantage of filing for bankruptcy includes the protections of the automatic stay, an official order issued as soon as you file for bankruptcy that prevents creditors and other institutions to whom you owe money from attempting to collect the money they’re owned for the duration of the case. Student loans are included in the automatic stay, so filing for bankruptcy can provide some breathing room in which you can focus on eliminating or prioritizing other debts like vehicle loans or mortgages in chapter 13 without having to worry about paying back student loans until your case receives a discharge. In some rare cases student loans can be discharged in bankruptcy, but only if “undue hardship” can be proved according to §523(a)(8) of the United States Bankruptcy Code. “Undue hardship” has three characteristics: debtors with undue hardship cannot maintain a minimal standard of living for themselves and their dependents if forced to repay student loans, the state of hardship the debtor is in is likely to continue based on additional circumstances, and the debtor has made efforts in good faith to repay their loans.
To better understand if filing for bankruptcy is the right choice for you, it is recommended you set up a consultation with a local bankruptcy attorney.
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