How to Eliminate Student Loans in Bankruptcy (Maybe!)

2 decadence-robin-mead
Art: Robin Mead

Many people believe that it is not possible to get student loans discharged in bankruptcy. However, according to this NPR article, that is not always true!

From the article: Turns Out Bankruptcy Can Wipe Out Student Loan Debt

“Jason Iuliano, a Villanova University law professor, says that over the past 30 years, Congress has made it harder to discharge student debt. You need to meet what’s called an “undue hardship” standard. That also means more work for your lawyer.

“But Iuliano says that this has created the misconception that it’s nearly impossible to get help for student debt through bankruptcy. That’s not true.

When it comes to trying to get their student debt forgiven, “more than 99% of the student loan debtors in bankruptcy just give up without even trying,” Iuliano says. “It struck me as a really surprising statistic when I first uncovered it.”

“For those who do try, though, Iuliano’s research finds that about half the time the person gets some or all of the student loan debt erased. One study he did found that they got help through bankruptcy about 40% of the time. And he says more recent data from this past year show that figure rising to more than 50% of the time.”

Learn More About Discharging Through Bankruptcy

Better Options

Bankruptcy is not the only (or best) option.

If you are disabled, requesting a disability discharge will almost certainly be a better option, because it is cheaper, easier, doesn’t involve lawyers, and helps your credit instead of hurting it.

If you are low income, income based repayments can also be a better option in some cases: How to Escape the Crushing Weight of Student Loans

Thanks for Reading

🌸 This page is part of the free online guide: How to Be Poor in America

🌸 Art on this page by Robin Mead and Elizabeth D’Angelo.

🌸 Page Updated: 1/10/20

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