Many people wonder whether or not student loans can be discharged in a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. In almost all circumstances, student loans cannot be discharged. The only time a student loan can be discharged is when there is a hardship on the debtor that makes it impossible for him or her to ever be able to pay off the loan.
This does not apply to a debtor that is unable to pay the debt back in a reasonable time, this applies to debtors that have faced some extreme hardship. This means the debtor would have to become completely incapacitated either physically or mentally, or the hardship is such that the debtor is required to be the main caregiver of an immediate family member because of an injury or accident. It is only in very extreme circumstances that a debtor can discharge student loans in a bankruptcy.
In order to qualify for the ability to wipe out student loans in bankruptcy, there would also have to be a hearing to prove the debtor’s hardship. The ability to wipe out student loans because of hardship is not something that is automatic. It should be understood that in almost all bankruptcy cases student loans will not be discharged.
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