Is it Possible to Discharge Student Loans in Bankruptcy?

 Posted on September 17, 2024 in Bankruptcy

People with advanced degrees are just as likely to struggle with debt as anyone else. Often, this happens after a long illness, a sudden change in the economy, or a business venture that did not work out. Having student loan debt can lead to wage garnishment in Texas. Normally, student loans are not discharged in bankruptcy. However, in some very limited circumstances, it is possible to discharge your student loans by filing for bankruptcy. A few strict requirements must be met in order to find relief from student loan debt this way. If you are in a position where you are very unlikely to ever regain the ability to make payments toward your student loans, you should speak with a Houston, TX debt relief lawyer to see if you qualify.

When Can Student Loans Be Discharged in Bankruptcy? 

Most often, it is people who become permanently disabled after taking out student loans who qualify to discharge their student loan debt. You may be eligible to discharge your student loans through the bankruptcy process if you meet these requirements:  

• Severe hardship - First, you must show that you are experiencing extreme hardship that is preventing you from making payments towards your student loan debt. The hardship is often the debtor’s disability. For example, if you suffered a traumatic brain injury that prevents you from working, this would likely be considered a severe hardship. 
• The hardship is near-permanent - You will also need to prove that the hardship you are experiencing is likely to last for the entire duration of the repayment period. This is why hardships like having a serious but treatable illness such as cancer or having to quit your job to care for an elderly loved one, normally do not count. 
• Making payments would make living impossible - You must be able to demonstrate that if you were required to keep making payments toward your student loans, you would not be able to meet your basic needs. For people who are reliant on disability, this requirement is normally met. However, if you have extra income after covering your living expenses, you might not meet this requirement. 
• You have a good payment history - You must have been making good-faith efforts to repay your student loans before the hardship arose. 

Contact a Harris County, TX Debt Relief Lawyer 

The Fealy Law Firm, PC is committed to helping qualified people discharge their student loans. Experienced Houston, TX bankruptcy attorney Vicky Fealy will do all she can to help you prove that you meet these requirements and should not be expected to keep making student loan payments. Contact us at 713-526-5220 for a complimentary consultation.