Several types of debts, student loans continue to be one of the few exceptions while you are able to declare student loan bankruptcy to eliminate. Recently, student loans cannot be discharged through traditional student loan bankruptcy procedures. Despite your how far you might be behind on your loan payments or income status, the fact is that discharging your student loans by bankruptcy, at this time, is not a choice. But, there are indications that this can be changing in the future.
While traditional student loan bankruptcy is not yet an accessible choice, some procedures can be tried to make student loans discharged, even though they are anything but easy. These procedures apply to each federal and private student loans and are outside the traditional student loan bankruptcy process. Congress got federal student loans ineligible for discharge to secure the solvency of the federal loan program. But, if borrowers can verify that they meet certain standards, exceptions have been made. The process is complicated though.
(Also, a recent court case shows that discharge may also be possible if the borrower can prove their student loan did not constitute an “educational benefit.”)
Private student loan consolidation is available through various banks we work with to combine all your student loans into one new loan. Private student loan consolidation requires a good credit score and will often have better rates than the federal student loan.