If you’re one of the millions of U.S. adults with tens of thousands or even hundreds of thousands of dollars in student loan debt, paying back that debt can be overwhelmingly difficult. And if continuing to make your student loan payments has caused you or your family financial hardship, filing for bankruptcy may be in your best interest.


Here’s what you should know about student loan bankruptcy and how it works.


What Is Student Loan Bankruptcy?

First and foremost, you should know there’s no special type of bankruptcy for student loan debt. And although you may have read that bankruptcy will not eliminate the student loan debt you owe, that’s not entirely true.


You may be able to get your student loans partially or entirely discharged by filing for Chapter 7 or Chapter 13 bankruptcy. However, you must prove that continuing to make student loan payments would cause you undue hardship.


How Does Student Loan Bankruptcy Work?

If you have a substantial amount of student debt and are struggling to make your required payments, chances are your student loans aren’t your singular source of financial stress. And if they are, you’re unlikely to succeed in getting them discharged through bankruptcy.


That’s because getting student loan debt discharged in bankruptcy isn’t easy, and ultimately, the court determines whether you qualify for discharge based on your financial situation.


To absolve yourself of the student loan debt you owe, you must first file for Chapter 7 or Chapter 13 bankruptcy. In addition to completing all of the required paperwork and steps to file for bankruptcy, you must also file something called an adversary proceeding (AP) if you want your student loans considered for discharge.


For a more in-depth look at student loan bankruptcy, see Student Loans and Minnesota Bankruptcy: How to Discharge Student Loans.


Factors to Consider Before Filing for Student Loan Bankruptcy

Filing for bankruptcy and filing an adversary proceeding does not guarantee that your student loan debt will be discharged. As such, it’s important to consider how filing may impact your finances in the event your student debt does not qualify for discharge.


Here are a few of the most important factors to consider.

The type of student loans you have.

If you have private loans, you may have a better chance of getting those loans discharged because federal loans offer income-driven repayment plans and private loans do not.

Whether you have other high-priority debts.

If you file for Chapter 13 bankruptcy and have other high-priority debts, you’ll be required to pay back those debts first. Even if the court reduces the size of your student loan payments, your loans will continue accruing interest, which will only add to the amount you already owe. 

Whether your only debt is your student loan debt.

If the only substantial debt you have is student loan debt, the court may view your case as an intentional strategy to avoid paying back your loans. Ultimately, you’re not likely to win your case.


Get a Free Student Loan Bankruptcy Consultation in the Twin Cities

If you’re considering bankruptcy because you owe an overwhelming amount of student loan debt, don’t hesitate to reach out to Ron Lundquist, Attorney at Law for help. As one of Minnesota’s leading bankruptcy attorneys, Ron has helped thousands of clients with their debt relief needs over the last 20 years. If you’re drowning in student debt, he may be able to help you, too.


To learn more about your student loan debt relief options, feel free to request a free consultation online or call the office at 651-454-0007 to get started.