Can student loans be discharged in Chapter 7?

Most debtors won’t be able to discharge (wipe out) student loan debt in Chapter 7 or Chapter 13 bankruptcy. However, if you can prove that repaying your student loans would cause an undue hardship to you, you can get rid of your student loans in bankruptcy.

Can student loans be cleared with bankruptcy?

Absolutely. Though difficult, it is still possible to have student loans discharged through bankruptcy by meeting the undue hardship requirement. A 2011 study found that only 1 in 1,000 student loan borrowers who declared bankruptcy even tried to have their student loans discharged.

What is undue hardship for student loans?

Undue hardship is a term used to describe a situation where you would experience excessive suffering if you were forced to repay your student loans. Ordinary suffering or hardship is insufficient. Undue hardship can look different from person to person. There is no universal definition.

What happens if you never pay student loans?

Your account will remain delinquent until you pay the past due balance and any fees. If payment is 30 days late. If you don’t make your full monthly payment within 30 days of your due date, your loan servicer will charge you a late fee. The fee can be as high as 6% of your late payment amount.

How do you get rid of student loans?

Options to Get Out of Repaying Student Loans Legally

1. Loan Forgiveness Programs.
2. Income-Driven Repayment Plans.
3. Disability Discharge.
4. Temporary Relief: Deferment or Forbearance.
5. Student Loan Refinancing.
6. Filing for Bankruptcy: A Last Resort.

Why are student loans not dischargeable in bankruptcy?

To discharge student loans in bankruptcy, most borrowers must show that they have an “undue hardship,” which is a difficult standard to meet and is not well-defined in statute. Consequently, many student loan borrowers are not able to prove undue hardship, and many others decline to pursue the avenue at all.

Will my bankruptcy automatically come off?

Dear ENZ, You don’t have to do anything to have a bankruptcy removed from your credit report. The bankruptcy and any included accounts will be deleted automatically. The discharge date is the date the bankruptcy plan is completed after being filed.