Can Student Loans Be Discharged in Chapter 13?
Many people wonder: Can I discharge my student loans in bankruptcy? Americans owe over $1.4 trillion in student loan debt. Student loan debt surpasses credit card debt by about $620 billion. In fact, the average graduate from the class of 2016 finishes college with $37,172 in student loan debt.*
Student loans, by and large, are not dischargeable in Chapter 13. The court would only grant a discharge of your student loans under extremely special circumstances, called “undue hardship.” The burden of proof falls on the Debtor to prove this undue hardship, and few have been successful.
If you owe student loans, this is normally how it works: Your student loan company should file a claim to be paid through your bankruptcy. Depending on the amount you owe, you will probably only pay some of that claim back. Because student loan balances may be too large to pay in full in just 5 years, you normally will only pay part of the loan through your Chapter 13 plan. This means you may still need to make payments on your student loans after your Chapter 13 bankruptcy is over.
If you have questions about student loans in bankruptcy, contact our office to speak with an attorney. We offer free legal consultations.
*Source: Student Loan Hero