Can I Discharge My Student Loans?


Student loans are a major issue in bankruptcy.  Many people have student loans that they cannot repay.  The value of college and graduate degrees is declining in the current economy.  In addition, more and more for profit colleges are lending money to students for virtually worthless degrees.

Unfortunately, student loans are not automatically dischargeable in bankruptcy like most other debts.  In fact, student loans are hard to discharge.  You have to file an adversary proceeding for a judgment of dischargeability from the bankruptcy court.  In the adversary proceeding you have to prove that the student loans are an undue hardship.

Undue hardship means that: 1) you cannot maintain a minimal standard of living if forced to repay the loans, 2) additional circumstances show that this situation will persist for most of the repayment period, and 3) that you have made a good faith effort to repay the loans.

This is difficult to prove and is case specific.  This means that your bankruptcy lawyer has to look at the particular facts and circumstances of your case, to determine whether you have a shot at discharging your student loans.

It’s not all bad news.  In Washington State, you can receive a partial discharge of your student loans.  This means that the court could reduce the loan burden to the point that you can maintain a minimal standard of living while repaying your loans.

If you have questions about discharging your student loans in bankruptcy, you should contact a bankruptcy attorney experienced in student loan discharge cases.