When someone files for bankruptcy, the bankruptcy court may discharge their debts. Non-dischargeable debts are those that typically cannot be discharged by filing for bankruptcy and must be settled. If the program under which your student loan was issued involved only for-profit, private (non-government) entities, your student loan may be dischargeable for cases filed before October 17, 2005. However, the loan is not dischargeable in bankruptcy if the program is fully or partially funded by non-profit organizations (for instance, a non-profit university or guarantor). Federal and private student loans are not dischargeable in bankruptcy under current law for cases filed on or after October 17, 2005, unless you can prove that making your loan payments causes you, your family, and your dependents “undue hardship.” It has historically been very challenging to demonstrate “undue hardship.” “Courts have generally opposed student loan discharge, but some courts will discharge part of a student loan if repayment would cause an undue hardship You must file a separate motion with the bankruptcy court, then show up in court to explain your hardship, in order to have a student loan discharged on grounds of undue hardship.
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When someone files for bankruptcy, the bankruptcy court may discharge their debts. Non-dischargeable debts are those that typically cannot be discharged by filing for bankruptcy and must be settled. If the program under which your student loan was issued involved only for-profit, private (non-government) entities, your student loan may be dischargeable for cases filed before October 17, 2005. However, the loan is not dischargeable in bankruptcy if the program is fully or partially funded by non-profit organizations (for instance, a non-profit university or guarantor). Federal and private student loans are not dischargeable in bankruptcy under current law for cases filed on or after October 17, 2005, unless you can prove that making your loan payments causes you, your family, and your dependents “undue hardship.” It has historically been very challenging to demonstrate “undue hardship.” “Courts have generally opposed student loan discharge, but some courts will discharge part of a student loan if repayment would cause an undue hardship You must file a separate motion with the bankruptcy court, then show up in court to explain your hardship, in order to have a student loan discharged on grounds of undue hardship.
FAQ
When did student loans stop being dischargeable?
Federal and private student loans are not dischargeable in bankruptcy under current law for cases filed on or after October 17, 2005, unless you can prove that making your loan payments causes you, your family, and your dependents “undue hardship.”
Do student loans get discharged after 20 years?
If you haven’t repaid your loan in full after 20 years (if all of your loans were taken out for undergraduate study) or 25 years (if any of your loans were taken out for graduate or professional study), you will lose any remaining balance.
Will Chapter 7 wipe out student loans?
Only if you file a separate lawsuit, referred to as an “adversary proceeding,” asking the bankruptcy court to find that repayment would put you and your dependents through an unreasonably difficult situation can you have your federal student loan discharged in bankruptcy.
Are student loans being forgiven after 10 years?
If they meet the requirements of the federal program, qualified borrowers can have their loans forgiven after ten years.