For years, people were told that student loans can never be discharged in bankruptcy. But in recent years, that belief has changed. Under certain conditions—and with proper legal guidance—it is possible to discharge federal and private student loans through bankruptcy.
If you’re overwhelmed by debt and considering bankruptcy, understanding how a student loan lawyer fits into your strategy could be the key to getting a fresh start.
In this article, we’ll cover:
- How bankruptcy interacts with student loans in 2025
- The “undue hardship” rule and how lawyers argue it
- The bankruptcy process with student loans
- How a lawyer builds and proves your case
- What types of loans are dischargeable
- Real outcomes borrowers are achieving today
Quick Recap: Can You Discharge Student Loans in Bankruptcy?
Yes—but it’s not automatic. To get student loans discharged in bankruptcy, you must:
- File for Chapter 7 or Chapter 13 bankruptcy
- File a separate lawsuit within the bankruptcy called an Adversary Proceeding
- Prove that repaying your loans would impose an undue hardship
This is where most borrowers struggle—proving undue hardship is complex and requires clear evidence, legal arguments, and often court hearings.
That’s where a student loan lawyer becomes your most powerful ally.
What Is the “Undue Hardship” Rule?
Courts generally use one of these tests to determine if you qualify for student loan discharge:
1. The Brunner Test
Most commonly used, the Brunner Test has three requirements:
- You can’t maintain a minimal standard of living while repaying your loans.
- Your financial situation is likely to persist.
- You have made good-faith efforts to repay.
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2. Totality of the Circumstances Test
Used by some courts, it evaluates:
- Income vs. expenses
- Loan terms
- Medical or family burdens
- Attempts to negotiate repayment
In 2022, the Department of Justice issued new guidance making it easier for borrowers to prove undue hardship under federal loans.
What Does a Student Loan Lawyer Do in Bankruptcy?
Here’s how a student loan attorney helps you navigate this process:
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1. Evaluates Your Case for Eligibility
Not all borrowers qualify. A lawyer can review:
- Loan types (federal, private)
- Your financial records
- Your prior repayment history
They’ll give you an honest assessment and strategy tailored to your situation.
2. Files the Bankruptcy and Adversary Proceeding
Bankruptcy alone doesn’t touch student loans. A lawyer:
- Files your Chapter 7 or Chapter 13 case
- Initiates the Adversary Proceeding to request loan discharge
- Prepares pleadings, exhibits, and affidavits
This process involves technical legal steps that are easy to get wrong without help.
3. Builds a Strong Legal Argument
To prove undue hardship, lawyers gather:
- Budgets showing essential living expenses
- Tax returns, bank statements, pay stubs
- Medical records (if relevant)
- Evidence of repayment attempts or contact with loan servicers
They package this into a convincing legal argument aligned with the court’s standards.
4. Negotiates With the Department of Education or Lenders
Thanks to the 2022 DOJ bankruptcy guidance, federal student loan attorneys can:
- Submit a hardship attestation form
- Work with the government to recommend discharge to the court
Many borrowers are now settling student loans or receiving partial/full discharges with no trial required.
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5. Represents You in Court If Needed
If the case goes to a hearing, your lawyer will:
- Question witnesses (you, servicers)
- Defend your position under cross-examination
- Argue your case in front of the judge
Most borrowers wouldn’t feel confident doing this alone.
Which Loans Can Be Discharged?
| Loan Type | Dischargeable in Bankruptcy? | Notes |
|---|---|---|
| Federal Direct Loans | ✅ Possibly | Use DOJ hardship guidance |
| Parent PLUS Loans | ✅ Possibly | Same as Direct Loans |
| FFEL Loans | ✅ Possibly | Treated like Direct Loans in most cases |
| Perkins Loans | ✅ Possibly | Dischargeable with hardship |
| Private Student Loans | ✅ Often | Courts increasingly allow discharge |
| School-Issued Loans | ✅ Often | Depends on contract language |
Key Tip:
Private loans are often more vulnerable in bankruptcy because they lack the federal protections—and many were misrepresented during origination.
Real Case Example
Client: Jason, 42, California
Loans: $135,000 federal and $27,000 private
Income: $42,000/year, chronic medical condition
Action: Filed Chapter 7 with student loan lawyer
Outcome:
- $27,000 private loans: Fully discharged
- $135,000 federal loans: $80,000 discharged via settlement
Jason avoided lifelong debt and restarted his finances thanks to skilled legal help.
What Does It Cost to Hire a Student Loan Bankruptcy Lawyer?
| Service | Estimated Fee |
|---|---|
| Chapter 7 Filing | $1,500–$2,500 |
| Chapter 13 Filing | $3,000–$5,000 |
| Adversary Proceeding | $2,500–$7,500 |
| Full Case Representation | $4,000–$10,000+ |
Some lawyers offer:
- Flat rates
- Monthly payment plans
- Reduced fees based on income
- Bankruptcy is a serious decision—consulting with a specialized attorney is crucial.
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FAQs About Student Loans and Bankruptcy
Q: Will bankruptcy ruin my credit?
A: Bankruptcy does lower your credit initially, but it also wipes out or restructures debts—allowing your score to rebuild faster than if you remained in default.
Q: Will bankruptcy affect my job or future loans?
A: Rarely. Most employers don’t penalize for bankruptcy. Getting credit or a mortgage may take time, but many rebuild within 1–2 years.
Q: Will I lose my house or car?
A: No, not necessarily. Chapter 13 helps you keep your property and repay over time. Chapter 7 protects certain assets through exemptions.
Q: Can I discharge student loans without a lawyer?
A: Technically yes—but the adversary proceeding is complex and often lost by pro se filers. Hiring a lawyer dramatically improves your chances.
When to Consider Bankruptcy for Student Loans
You should consider it if:
- Your debt is unmanageable, even on IDR plans
- You’ve had a major life change (disability, job loss, illness)
- You’re in default or collections
- You have private loans with no relief options
- You’ve tried other options like forbearance, rehab, or settlement
How to Find a Student Loan Bankruptcy Lawyer
Use trusted sources like:
- National Association of Consumer Bankruptcy Attorneys (NACBA)
- National Consumer Law Center (NCLC)
- Your local bar association
Ask questions like:
- “How many student loan cases have you handled?”
- “Do you follow the latest DOJ guidelines?”
- “Can you help with both Chapter 7 and Chapter 13?”
Final Thoughts
Bankruptcy is not a last resort—it’s a legal tool designed to give honest people a second chance. And now, in 2025, discharging student loans through bankruptcy is more possible than ever, especially with the help of a qualified student loan lawyer.
Don’t let misinformation or fear keep you trapped in debt. Talk to a lawyer, learn your options, and take the first step toward financial freedom.