The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
  • Books
  • Categories
  • Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
No Result
View All Result
The Money Coach
No Result
View All Result

Can Student Loans Be Discharged Through Bankruptcy?

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Student Loans
Reading Time: 3 mins read
8
SHARES
125
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Q: I recently filed for bankruptcy and it was discharged in October. But on my credit report one of my student loans was listed as being discharged. Is that possible and can they still come after me for garnishment?

A: Student loans are generally not dischargeable in bankruptcy court – regardless of whether they were federal college loans or private student loans.

In order to get student loans wiped out in a bankruptcy filing you would have to make a special petition to the court and get your request approved.

Most people don’t even bother trying, because such requests are almost always denied. To get a student loan included in bankruptcy, you must demonstrate an extreme hardship scenario to a judge and get a court’s express permission to have those loans included in bankruptcy.

It’s not impossible. But it is very, very rare.

No Slack from the Courts

In 2009, there were 1.4 million bankruptcy filings in the United States. Courts are generally reluctant to wipe out student loans in a bankruptcy filing because they figure you will ultimately get back on your feet and will be able to pay those student loans off eventually.

So even among the hundreds of thousands of people who filed for bankruptcy after being laid off, sick, divorced, stuck with high medical bills, in severe credit card debt, and so on, those people didn’t get their student loans discharged. It has to be a much more severe, extraordinary circumstance for a student loan discharge in bankruptcy court.

An exception to this might be if your doctor certified that you were permanently and totally physical disability – and you also could demonstrate, say, long-term, chronic unemployment. This situation might render you unlikely to be able to repay your debts, including student loans.

What to Do Next

I would double-check your credit report, therefore, to make sure that you are interpreting the information correctly. If it does indeed show that a student loan was discharged I wouldn’t necessarily go shouting from the rooftops about it – nor would I rush to the bankruptcy trustee and tell that individual that he or she “made a mistake.”

Instead, you should do two things to cover yourself from a legal and moral perspective.

First, reach out to all three credit reporting agencies (TransUnion, Equifax and Experian), as well as your student loan company or loan guarantor and find out if their records also show your student loan as having been discharged. If so, there’s your answer; case closed.

That debt is legally discharged. If not, I would be prepared to repay that student loan – as I’m sure you originally intended to do.

Protecting Your Finances and Your Credit

I suspect that, based on your question and the fact that you were surprised to see your student loan debt listed as discharged, that you did not intend to include this in your bankruptcy filing and did not know that this would occur. So if this debt remains outstanding, do the right thing, and honor your obligation to repay what you still legally owe.

If the debt is still outstanding, repayment of it will not only clear your conscience, it will also protect your finances.

After all, student loans have no statute of limitations, meaning that creditors can pursue you forever to make you pay. If you default on federal student loans, your wages can be garnished, you can be subjected to collections activity, your credit rating will be damaged and you could lose any professional licenses you may have earned. It’s simply not worth risking all that by skipping out on making those student loan repayments.

Tags: credit bureausStudent loan default
Previous Post

FHA Loans Explained

Next Post

I Need a Reliable Online Tool That Would Help Me Budget My Income and Expenses.

Related Posts

Adult Student Loans

Simple Reasons To Pay Your Adult Child’s Student Loans

by Lynnette Khalfani-Cox, The Money Coach

If you’re considering paying your adult child’s student loans here are 10 scenarios to consider saying YES, NO or MAYBE to repaying that college debt. 

Question About For-Profit Colleges and Student Loan Forgiveness

by Lynnette Khalfani-Cox, The Money Coach

After I posted 15 answers to Biden’s student loan forgiveness plan,  I received a lot of questions on my social media accounts about student loan forgiveness. I received the following question about the plan's impact on certain for-profit colleges.

Student Loan Forgiveness

Student Loan Forgiveness: The Biden Plan Explained

by Lynnette Khalfani-Cox, The Money Coach

Here's what is known so far about the new student loan cancellation program, how you can get student loan forgiveness, the surprising ways that past and future generations of college students will benefit, and what’s NOT included in the Biden plan.

CARES Act: Student Loan Relief

Get Your Employer to Pay $5,250 of Your Student Loans in 2020: FAQs About the CARES Act

by Lynnette Khalfani-Cox, The Money Coach

I recently posted a student loan tip on social media that went crazy viral! It racked up tons of traditional media coverage, plus many thousands of likes and shares (not to mention comments and questions!) across Twitter, Facebook and Instagram -- far more than any other single post I've shared....

COVID-19 Private Student Loans

COVID-19: Getting Relief From Your Private Student Loans – VIDEO

by Lynnette Khalfani-Cox, The Money Coach

In this video Lynnette shares good news for people who need help paying their private student loans during the COVID-19 pandemic.

Economic Relief Bill

COVID 19: A Good News Surprise in the Coronavirus Economic Relief Bill – VIDEO

by Lynnette Khalfani-Cox, The Money Coach

In this video Lynnette dives deep into the CARES Act and shares a pleasant surprise in the economic relief bill.

student loan relief covid-19

Are You Eligible for Student Loan Relief Under The CARES Act?

by Lynnette Khalfani-Cox, The Money Coach

The CARES Act, which includes a provision that decreases student loan interest to zero-percent, and allows individuals to suspend payments without penalty until September 30, 2020. 

Load More

Popular Posts

  • Car repair

    What to Do If You Can’t Afford a Car Repair Bill

    1378 shares
    Share 551 Tweet 345
  • What to Do if Your Spouse Stole Money From You

    1167 shares
    Share 467 Tweet 292
  • What to Do If You Can’t Afford to Leave Your Spouse

    1104 shares
    Share 442 Tweet 276
  • Here’s Why I Pay My Kids For Good Grades (And Maybe You Should Too)

    1011 shares
    Share 404 Tweet 253
  • What Do All Those Strange Codes In My Credit Report Mean?

    815 shares
    Share 326 Tweet 204
  • Do This Now If Your Wages Were Not Reported

    745 shares
    Share 298 Tweet 186
  • How to Find Out if a Debt Collector is Licensed to Collect Your Debt

    724 shares
    Share 290 Tweet 181

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2023 TheMoneyCoach.net, LLC. All Rights Reserved.

RSS / Sitemap /Submit an Article / Privacy Policy / LynnetteKhalfaniCox.com

No Result
View All Result
  • Books
  • Categories
  • Contact Lynnette
  • Get Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
  • Home
  • Subscribe to Newsletter
  • QR Code

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist