The most important difference between student loan debt and most others is that student loan debt can almost never be discharged through bankruptcy. If a debtor who has student loan debt files for bankruptcy, he or she is only allowed to discharge a portion of the student loan debt.
The main reason for this is that student loan debt is a form of debt with little to no ability to pay back. That's right no matter how much money the debtor earns, the same amount of money isn't going to come out of his or her paycheck. In fact, the vast majority of those with student loan debt don't ever plan on paying it back. If the debtor does become wealthy, it will only be through investment or through the selling of assets such as houses, cars, etc. Many student loan borrowers simply can't afford to repay their student loans, even with the best of financial planning and strategies.
The same goes for debt owed to other parties. A borrower will generally only be able to discharge debt owed to others through bankruptcy. However, there are other alternatives to this as well. In general, loans can be discharged if they are non-payment and the debtor did not intend to make good on the debt. This means that, in most circumstances, a debtor can discharge their student loans and still not have to pay them back.
Debt is a scary topic to many because it seems to be so closely related to people's credit histories. If a student borrows money and can't make payments on it, it could potentially impact their credit. Unfortunately, in many cases, the student will be unable to get a loan discharge because the lender may be concerned that the student will default on the loan or even use the money to pay off other creditors. However, there are other alternatives to this as well. In general, loans can be discharged if they are non-payment and the debtor did not intend to make good on the debt. This means that, in most circumstances, a debtor can discharge their student loans and still not have to pay them back.
In some cases, the only way to get a loan discharged is if the borrower makes a voluntary payment agreement (also known as a loan discharge or forbearance agreement). In other cases, if you have an SSA deferment or you're not going to pay your student loans as part of an approved repayment plan, you may be able to get your loans discharged through bankruptcy.
Determining whether you can get a student loan discharge
In order to determine whether you're eligible for a student loan discharge, you'll need to first determine what types of federal student loans you have. The three main types of federal student loans you can file for student loan discharge are a Stafford loan, PLUS loan, and Direct loan. Each of these three types of student loans has a different set of rules to follow. To learn more about your options for repayment, you can refer to the tables below. Stafford Loans Stafford loans are the only type of student loan that you can file for student loan discharge through bankruptcy. A Stafford loan may have one or more of the following conditions: Unpaid balance due on the loan.
Lack of sufficient payment history
Incorrect or missing discharge application information
Incorrect or missing credit report information Student Loan Discharge Basics You have the right to file for bankruptcy to discharge your federal student loans.