Student Loan Debt In Bankruptcy

: Chris Lee Law Firm

  Filed under: Student Loans

student loan in bankruptcyAlthough, other unsecured debts such as your personal loans, medical bills, credit card debts and so on are automatically discharged when a Chapter 13 bankruptcy is filed, your student loan (which is also an unsecured debt) is nondischargeable by law. While it is impossible to completely wipe out your student loan in bankruptcy, you can still use Chapter 13 to manage your repayment.

Student Loan Debt In Bankruptcy

Here are a few ways in which Chapter 13 can help manage your student loan debt by delaying and cutting back on your monthly repayment obligations.

  • Filing for a chapter 13 bankruptcy imposes an ‘automatic stay’ which legally prohibits most of your creditors from harassing you in repaying your debts. The automatic pay also prohibits your student loan lending company from trying to collect their dues from you during your bankruptcy.
  • Once you file for your chapter 13 bankruptcy, you will not be required to necessarily make your regular student loan payments, even if you do not have sufficient disposable income to cover the liability. The court will also design a repayment plan for your chapter 13 which will take care of your student loan repayments. However, it is important to note that the interest on your student loan will continue to accrue and you will be obligated to repay the entire amount once the case is closed.
  • Your chapter 13 repayment plan also allows you to make your student loan payments as and when it is feasible for you to do so. For instance, if you are unable to afford your regular repayment plan, you can make smaller payments and reduce your monthly obligations. Given the fact that the chapter 13 bankruptcies typically last for a period of five years, you have abundant time to manage your income and enhance your financial capability and afford your student loan debt.

If you are struggling with student loan debt, contact a Fort Worth bankruptcy lawyer for help. We can discuss your options and help you find the debt relief you need.


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