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Can you file bankruptcy on student loans? This is one of the most commonly asked questions among borrowers struggling with student debt. Unlike credit cards or medical bills, student loans are notoriously difficult to discharge. But despite the challenges, it is possible to eliminate student debt through bankruptcy—if you meet certain legal standards.
In this article, we’ll walk you through why student loans are treated differently in bankruptcy, what legal tests you must pass, and how the process actually works in court. We’ll also discuss your options if bankruptcy doesn’t provide full relief.
Student loan debt is handled differently in bankruptcy than most other kinds of debt. While credit card debt, utility bills, and personal loans can often be wiped out in Chapter 7 or Chapter 13 bankruptcy, student loans require a much higher burden of proof.
Before diving into the legal requirements, it’s important to understand which type of student loans you have:
While federal loans are subject to strict hardship tests in bankruptcy, some private loans may be easier to challenge, especially if they were used at non-accredited schools or for non-qualified education expenses.
For decades, student loans have been treated as “nondischargeable” under the U.S. Bankruptcy Code unless the borrower can prove undue hardship.
This higher standard began in the late 1970s and was later cemented by the Brunner Test, a legal framework that sets strict criteria for eliminating student debt.
The reason for this stricter approach is based on public policy. Lawmakers have argued that because student loans are often unsecured and federally funded, they need to be protected from abuse. In other words, if borrowers could easily wipe out student debt, the system might collapse under the financial strain.
While the intent was to maintain stability in the student loan system, it’s also led to decades of hardship for borrowers facing genuine financial crises.
If you’re asking, can you file bankruptcy on student loans, you’re really asking: Can I prove undue hardship to a bankruptcy court?
The answer depends on which legal test your bankruptcy court uses and how well you can document your financial struggles.
Most bankruptcy courts use the Brunner Test, which originated from a 1987 court case. To discharge student loan debt, you must meet all three parts of this test:
Each element must be proven with detailed evidence. This is where many borrowers fall short—not because their hardship isn’t real, but because they don’t present their case effectively.
Let’s say you’re a single parent earning minimum wage with no college degree, facing chronic illness and medical bills. You’ve tried income-based repayment, contacted your loan servicer multiple times, and haven’t made much progress. In this case, a court may view your situation as satisfying all three Brunner prongs.
Some courts use a less rigid approach called the Totality of Circumstances Test. Rather than requiring a three-part analysis, the court evaluates:
This test allows more flexibility and may be more favorable in certain jurisdictions. Courts using this method focus on the broader financial picture rather than a strict checklist.
Regardless of the test applied, the court will require substantial documentation to prove your case. This includes:
Being organized and thorough is crucial. Courts are less likely to rule in your favor if you submit vague or incomplete evidence.
Once you’ve filed for bankruptcy, simply listing your student loans isn’t enough to get them discharged. To pursue relief, you must file a separate legal action known as an adversary proceeding—a lawsuit within the bankruptcy case.
An adversary proceeding is a formal lawsuit filed against your student loan lender (or loan servicer) within your bankruptcy case. This is the step where you present your undue hardship claim and ask the court to discharge your student loan debt.
In this proceeding, you are the plaintiff, and your lender is the defendant. Both parties present evidence, and a judge decides whether your student loan should be discharged based on the Brunner Test or the Totality of Circumstances Test.
Here’s what to expect after initiating an adversary proceeding:
This process can take several months to a year, depending on the court’s schedule and whether both sides are cooperative.
Because the burden of proof is high and the process is complex, most borrowers benefit from working with a bankruptcy attorney, especially one who has experience in student loan adversary proceedings.
A skilled attorney can:
Some bankruptcy attorneys offer free consultations or flat-rate fees for adversary cases, making legal help more accessible than many assume.
If you’re unable to prove undue hardship or don’t want to file an adversary proceeding, there are still options to make student loan debt more manageable.
For federal student loans, income-driven repayment plans allow you to:
There are four IDR plans to choose from, including REPAYE, PAYE, IBR, and ICR. These plans help borrowers who earn modest incomes but can’t eliminate their debt through bankruptcy.
Borrowers who work in qualifying public service jobs—such as government, education, or nonprofit organizations—may be eligible for PSLF. This program offers tax-free forgiveness after 120 qualifying payments under an IDR plan.
To stay on track for PSLF:
For private student loans, bankruptcy discharge is still possible, but often more difficult. However, some private lenders may agree to settle the debt for less than the total balance if you can demonstrate financial hardship.
Refinancing is another option if:
Be cautious with refinancing federal loans, as you’ll lose access to forgiveness and government protections.
The question “Can you file bankruptcy on student loans?” has become more relevant than ever due to recent policy shifts.
In November 2022, the U.S. Department of Justice and the Department of Education issued new guidance to streamline the process of evaluating student loan discharge requests in bankruptcy.
Key changes include:
These reforms were designed to standardize how student loan cases are evaluated across jurisdictions and to make it easier for borrowers to prove undue hardship.
More courts and lawmakers are acknowledging the student debt crisis and rethinking the overly strict approach to student loan discharge.
Trends include:
These developments have improved the odds for borrowers with legitimate financial struggles.
Discharging student loans through bankruptcy isn’t easy, but it’s far from impossible. If you’ve exhausted repayment options, faced years of hardship, and have limited future income potential, the court may agree to wipe out part or all of your loan balance. The key is preparation, documentation, and legal guidance.
Start by understanding which legal test applies in your jurisdiction—the Brunner Test or Totality of Circumstances Test—and gather clear, detailed evidence that shows how student debt has made life unmanageable. The more thoroughly you support your case, the higher your chances of receiving a favorable ruling.
And remember, recent policy changes are making it easier than ever to pursue a discharge, especially if you have federal student loans and follow new DOJ/DOE guidelines.
Whether you’re pursuing full discharge, reduced payments, or forgiveness, it all starts with knowing your rights and taking strategic action.
If you’re asking, can you file bankruptcy on student loans? The answer might be yes, but your success depends on the strength of your case and the support you receive along the way.
Don’t try to handle it alone. A skilled bankruptcy attorney can:
Legal Brand Marketing connects borrowers with trusted, experienced bankruptcy attorneys who know how to handle complex student loan cases. Get help, take control of your debt, and move forward.
Contact us today to explore your legal options for student loan relief.
No. Unlike other debts, student loans require a separate legal step called an adversary proceeding to pursue discharge. You must prove undue hardship to qualify.
The Brunner Test evaluates whether repaying your loans would prevent you from maintaining a minimal standard of living, if your hardship is likely to persist, and whether you’ve made good faith efforts to repay.
In some cases, yes. Private loans used for ineligible schools or non-educational expenses may not be protected. Courts are increasingly open to reviewing these loans for potential discharge.
If the court denies your discharge, your student loans remain active. However, you’ll still benefit from the relief bankruptcy provides on other debts, making student loan repayment more manageable afterward.
In 2022, the Department of Education and the Department of Justice issued new guidelines that simplify and clarify how federal loans are reviewed in bankruptcy. These changes improve the odds for borrowers who meet hardship criteria.
Can You File Bankruptcy on Student Loans and What It Takes to Qualify Can you file bankruptcy on student loans?
