When you hear the two words, "student loan," do you have an emotional reaction?
One of the most common questions we get from college graduates is whether or not student loans can be discharged and eliminated through bankruptcy. It's no wonder why this is such an important question, especially when you consider that tuition rates and student loan debt are at all time highs.
In an era where an undergraduate degree can cost an astounding $200,000, people often ask us whether bankruptcy can help them escape student loans. The unfortunate reality is that few people have the option to discharge (free themselves of) student loans through bankruptcy. The way the US Bankruptcy Code currently reads, you must face severe financial difficulties ("undue hardship") to be eligible for discharge.
In the course of a bankruptcy many of the filer's debts will be discharged. Generally the types of debts that qualify are clearly laid out. One type of debt where there is some question however, is student loan debt. While in some cases it has been discharged, it is extremely difficult to do.