This page was written, edited, reviewed & approved by Emil J. Fleysher following our comprehensive editorial guidelines. Emil J. Fleysher, the Founding Partner, has 15+ years of legal experience as a bankruptcy attorney. Our last modified date shows when this page was last reviewed.
For many people, student loans are one of the biggest financial burdens they face. When other bills pile up and income falls short, it’s normal to wonder if filing for bankruptcy can help eliminate or reduce this debt. While student loans are not treated like most unsecured debts, there are legal options that might offer relief depending on your situation.
Fleysher Law Bankruptcy & Debt Attorneys works with student loan borrowers every day who are overwhelmed and unsure of their next step. Our goal is to help you understand how the law applies to federal student loans, private student loans, and whether your specific circumstances may meet the requirements for student loan discharge.
Bankruptcy may not erase all your debts, but it can still give you room to breathe. Our team can help you explore real solutions that ease the pressure and improve your future.
Many people are surprised to learn that student loan debt is treated differently than most other types of debt in bankruptcy. While some borrowers do find relief, the rules are stricter and the process requires extra legal steps to even ask for a discharge.
Some of the key things you need to understand before taking action are:
When you file for bankruptcy, your debts are typically sorted into categories like secured, unsecured, and priority debts, and most student loans, whether federal or private, are placed in a category that is not eligible for automatic discharge. That means even if your credit cards or personal loans are wiped out, your student loan debt usually remains unless you take additional legal action.
Many borrowers don’t realize this and assume bankruptcy will cover everything. In reality, the bankruptcy code specifically excludes student loans from being cleared unless a judge agrees that they meet certain hardship standards.
To have student loans discharged, you must prove to the court that repaying them would cause undue hardship, which is a high legal bar that’s not easy to meet. Most courts apply a strict test, often the Brunner test, which looks at whether you can maintain a basic standard of living, whether your situation is likely to continue, and whether you’ve tried to repay the loans in good faith.
This part of the process happens in a separate lawsuit within your bankruptcy called an adversary proceeding. Fleysher Law Bankruptcy & Debt Attorneys helps borrowers present strong evidence to meet the legal standard and give them a real chance at relief.
| Type of Student Loan | Federal Student Loans | Private Student Loans |
|---|---|---|
| Who Issues the Loan | U.S. Department of Education or federal loan servicers | Banks, credit unions, and private lenders |
| Repayment Options | Income-driven repayment plans, deferment, forbearance options available | Fewer flexible options; terms depend on the lender |
| Discharge Rules | Must prove undue hardship to discharge in bankruptcy | Must also prove undue hardship, but some courts may apply slightly looser review |
| Forgiveness Programs | Possible (e.g., Public Service Loan Forgiveness) | Not eligible for government forgiveness programs |
| Legal Complexity | Higher due to federal protections and loan servicing procedures | Often easier to challenge based on how the loan was used or structured |
Courts use specific tests to decide if student loans can be wiped out in bankruptcy. These tests help determine whether your current situation is serious enough to meet the undue hardship standard.
Most bankruptcy courts follow the Brunner test to decide if you qualify for a student loan discharge. First, you must show that you cannot maintain a minimal standard of living if forced to repay the student loans.
Second, you must prove your financial situation is unlikely to improve in the future. Third, you must show you’ve made a good-faith effort to repay the loan. This is often the hardest part of the case. Judges look at whether you tried income-driven repayment or made any payments at all.
Some courts reject the Brunner test and instead apply the totality of the circumstances test. This test is more flexible and lets the bankruptcy judge look at all facts together. It considers your age, health, job history, loan payments, and future chances to earn.
Judges using this test don’t follow a rigid formula. Instead, they focus on your overall financial circumstances, how long you’ve been making payments, and whether you’re truly struggling financially despite real effort to keep up.
Whether a court uses Brunner or the totality of circumstances, certain factors always matter. Judges will study your current income, living expenses, and how much you owe. They’ll check whether you’ve used tools like income-driven repayment plans and whether you’ve been honest about your student loan repayment history.
If you can show long-term hardship and a good faith effort to pay, the court may grant a full or partial discharge of your student loans. But success depends on clear proof, strong legal arguments, and help from an experienced bankruptcy attorney.
If you want to try to discharge student loans in bankruptcy, you must file a separate lawsuit within your bankruptcy case. This lawsuit is called an adversary proceeding. It is the only way for the bankruptcy court to decide whether your loans create an undue hardship.
Unlike a normal bankruptcy proceeding, this step requires you to show detailed evidence about your financial situation, past loan payments, and why repayment would prevent you from maintaining a minimal standard of living.
Fleysher Law Bankruptcy & Debt Attorneys helps student loan borrowers prepare this filing, gather documents, and present strong facts to support their case. Courts take these cases seriously, and you must prove your situation meets the undue hardship standard. Whether you have federal student loans or private student loans, this step is critical if you are serious about getting a student loan discharge.
Different types of bankruptcy treat student loans differently. The kind of case you file will determine how your loans are handled during and after the process.
Chapter 7 bankruptcy is known as a liquidation bankruptcy, which can quickly wipe out many types of unsecured debts, but it does not automatically clear student loan debt. To have your federal student loans or private student loans discharged under Chapter 7, you must still go through an adversary proceeding and prove undue hardship.
While student loans are rarely discharged in standard Chapter 7 cases, this option may still help by eliminating credit card debt, medical bills, and other obligations, freeing up your income to focus on student loan repayment.
Under Chapter 13 bankruptcy, the court sets a three- to five-year payment plan based on your income and expenses. Your student loans will be included in this plan, but unlike other debts, they are not usually discharged.
Even though you may not get a student loan discharge, Chapter 13 allows you to pause collection, lower monthly payments, and prevent default while staying current on other responsibilities. This approach works well for borrowers with regular income who need structure and time.
Even if the court does not discharge student loans, bankruptcy can still ease the pressure. By stopping interest growth, lawsuits, and wage garnishment, the process gives student loan borrowers a break from aggressive collection efforts.
During bankruptcy, you may also qualify for income-driven repayment, loan rehabilitation, or debt settlement options that weren’t available before. Many people use bankruptcy to reduce financial stress and manage future financial resources more effectively, even if the student loan debt remains.
There are ways to make your student loans more manageable during bankruptcy, even if you don’t qualify for a full discharge.
If you're in a Chapter 13 case, your lawyer can propose a plan that lowers monthly payments on your student loans. While these payments don’t erase the balance, they can make your budget easier to manage while avoiding late fees and interest spikes.
After the plan ends, you may still owe the remaining balance, but you’ll have more control over your financial situation.
One of the biggest benefits of filing for bankruptcy is the automatic stay, which immediately stops collection calls, wage garnishment, and lawsuits, including for student loan debt. While this pause is temporary, it gives you breathing room to decide what to do next.
During this break, borrowers can explore federal loan forgiveness programs, apply for income-driven repayment plans, or start an adversary proceeding to request a discharge.
Even if your student loans aren’t discharged, bankruptcy may still help you get ahead. By wiping out most unsecured debts, the process allows you to focus your income on things like federal loans, rent, and family needs.
Many borrowers come out of bankruptcy with fewer bills, more flexibility, and a stronger ability to stay current on their loan payments.
New policies are making it easier for borrowers to seek relief from student loans through bankruptcy.
In 2022, the Justice Department and the Department of Education announced updates to how they review bankruptcy requests for student loan discharge. These changes created clearer guidelines and encouraged cooperation between agencies and borrowers.
Federal student loan borrowers can now submit detailed forms that help the government assist the court in assessing undue hardship. While the standard is still high, these changes give more people a real chance at having federal student loans discharged.
There is increasing political and public support for changing the bankruptcy code to make student loan relief more accessible. Lawmakers and consumer advocates argue that current rules are outdated and unfair to borrowers who are struggling financially.
Though reform hasn't passed yet, the growing pressure could eventually lead to better protections, especially for student loan borrowers with long-term hardships or those in medical or dental residency programs.
1. Can Federal Student Loan Debt Be Discharged Through Bankruptcy?
Yes, but it’s not automatic. To have federal student loan debt erased, you must file an adversary proceeding and demonstrate undue hardship. This means showing the court that your present ability to repay is limited and that your situation is unlikely to improve soon. Success often depends on strong evidence and proper legal support.
2. Will Bankruptcy Remove Student Loans From My Credit Report?
If your loans are discharged, that will be reflected on your credit report. However, if the court denies discharge, the loans will remain and continue reporting as usual. Even when debt discharged does not include your loans, bankruptcy may still help improve your overall credit health with guidance from a credit expert.
3. How Do Income and Family Size Affect Student Loan Bankruptcy Cases?
Your income and family size play a major role when courts assess whether you qualify under the means test or for undue hardship. These factors help determine your ability to maintain basic living standards while making loan payments and whether you can reasonably meet your needs over time.
4. Can I Use a Chapter 13 Wage Earner’s Plan to Manage Student Loans?
Yes. A wage earner’s plan under Chapter 13 allows you to include student loans in a court-supervised payment plan. While the loans are not automatically erased, this form of debt management can give you three to five years of reduced payments and protection from collections.
5. What if Only a Significant Portion of My Debt Is Unpayable?
If the court agrees that a significant portion of your loans creates an unfair burden, it may grant a partial discharge. The judge will look at your job prospects, federal benefits, present ability to repay, and whether you’ve tried other forms of federal student aid before deciding.
If student loan debt is keeping you stuck, we want to help you move forward. Fleysher Law Bankruptcy & Debt Attorneys understands how hard it is to keep up with payments while facing other bills, rising costs, and limited income. Whether you have federal student loans, private student loans, or both, we’ll help you understand your legal options.
We’ve helped many student loan borrowers file for bankruptcy and pursue a student loan discharge. If your case qualifies under the undue hardship rules, we can file an adversary proceeding and fight for full or partial relief. Even if your loans cannot be discharged, we’ll guide you through smart ways to reduce pressure and regain control.
Contact us now to schedule a free consultation with a knowledgeable Florida bankruptcy attorney. Let us help you protect your future and find real relief from overwhelming student loan debt.
Emil specializes in consumer bankruptcy, debt settlement, and mortgage modification, offering a holistic approach to solving mortgage and debt problems. Emil listens to clients, understands their circumstances and goals, and helps them make the right choices by presenting all options and contingencies.
He is dedicated to helping South Floridians regain their financial freedom from overwhelming debt caused by high interest credit cards, bad mortgage loans, and uninsured medical expenses.
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