CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

5 Tips for Navigating the Student Loan Bankruptcy Maze

can you file bankruptcy on private student loans Can you file bankruptcy on private student loans? Here’s what you need to know if you struggle to keep up with private and public loan payments.

Student loan debt is a huge problem in the United States. Many people find themselves in deep debt before they even begin earning money.

For many, bankruptcy is the best option when financial strife gets too intense. Public student loans issued by the government usually have a low interest rate, but this isn’t always the case for private loans. This puts you at greater risk for getting into financial trouble with student loans.

But can you file bankruptcy on private student loans?

If you struggle to make your student loan payments, you might consider bankruptcy as a way to get relief. While bankruptcy provides some relief, it’s not always the best option for dealing with student loan debt.

Here are five things you need to know about bankruptcy and student loans:

1. Bankruptcy Can Help You Get Rid of Student Loan Debt

If you file for bankruptcy, you may be able to get rid of your student loan debt. This is called a discharge. To qualify for a discharge, you must show that repaying the loan would cause undue hardship. This is not easy to do, and most people do not qualify for a discharge.

Can you file bankruptcy on private student loans?

When it comes to private loans, it’s possible to get a discharge. This is great news if your loans are part or in full private.

The Bankruptcy Code prevents certain types of debt from being discharged in bankruptcy. This includes debt incurred as part of an “educational benefit.” However, a 2020 court ruling determined private student loans don’t fall into this category.

2. Bankruptcy Can’t Help You If You Cosigned Your Student Loans

If you cosigned your student loans, you cannot discharge them in bankruptcy. This is because the loan is not just your debt, it is also the debt of the person who cosigned for you.

If you file for bankruptcy and do not have a cosigner, the lender may try to recover the debt from the cosigner.

3. Bankruptcy Can Help You Eliminate Private Student Loans

Bankruptcy can help you deal with a variety of types of debt, including some types of student loan debt. You and your bankruptcy attorney will evaluate you debt and determine how bankruptcy might help you.

Remember, just because it’s legal to discharge these debts in bankruptcy doesn’t mean it’s advisable. Make sure you weigh the implications of this drastic debt relief measure and consider all of your alternatives.

4. Bankruptcy Can’t Help You Get Rid of Federal Student Loans

Federal student loans are rarely eligible for discharge in bankruptcy.

There are a few exceptions.

If you can show that repaying the loan would cause undue hardship, you may be able to discharge the loan. This is difficult to do, so it’s important you work with an experienced bankruptcy attorney if this is something you want to accomplish.

5. Bankruptcy Has a Negative Impact on Your Credit Score

Filing for bankruptcy damages your credit score. This makes it more difficult to borrow money in the future or to get a job.

However, not paying your bills also damages your credit score. For many people, bankruptcy is the better option, despite its negative consequences.

If you would like more information on filing for bankruptcy or you have concerns that your student loan debt could get you into financial trouble, please contact our office today. We would be happy to answer any of your questions and help you get started on the path to financial freedom.

Contact the Law Offices of Robert M. Geller at 813-254-5696 to schedule a free consultation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

5 Common Budgeting Mistakes Newlyweds Make and How to Avoid Them

Budgeting mistakes are common, especially when you’re young. Not all newlyweds are young adults, but many first-time marriages do involve...
Read More

When Should Married Couples File for Bankruptcy Together?

There's no easy answer to the question of timing when it comes to bankruptcy. In some cases, it may make...
Read More

Can Your Spouses Debt Force You Into Bankruptcy?

If you're married and your spouse has a lot of debt, you may be wondering if that debt can force...
Read More

Do You Need a Bankruptcy Attorney If You’re Divorcing with Financial Problems?

Divorce and bankruptcies are more common than many people realize. Financial problems make a stressful transition even more difficult. If...
Read More

Can You File Bankruptcy without Your Spouse?

Filing for bankruptcy is a decision that should not be taken lightly. It can affect your financial life and the...
Read More

How Seniors Can Avoid Bankruptcy

Seniors are at a high risk of bankruptcy, but there are ways to avoid it. What do you need to...
Read More

What Happens If I Own Too Many Assets to File for Chapter 7?

Does hiding assets in bankruptcy protect them from your creditors? If you own too many assets to qualify for Chapter...
Read More

How to Find the Best Lawyer for Filing for Bankruptcy after Retirement

Many retirees decide to file for bankruptcy as a way to get a fresh start. But finding the right lawyer...
Read More

Does Declaring Bankruptcy Affect My Retirement Savings?

When you're struggling with debt, the thought of bankruptcy might cross your mind. But what would that mean for your...
Read More

Is a Reverse Mortgage Right for Me?

Reverse mortgages in Florida are loans that allow homeowners 62 and older to borrow against the equity in their homes....
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions