If you are between the ages of 25 and 34, odds are good that you worry about repaying your student loan(s). Approximately one-third of Americans in that age group have debt due to a federal student loan. Together, Americans owe over $1.5 trillion in federal student loans – not even counting the private loans that many students also take out to pay for a good education.

So, what do you do if your college experience did not work out? Life happens, and many things can take priority over classes. Almost two-thirds of students who default on their student loans did not finish their degree or earn a certificate instead. This can make it more difficult to pay back the original loan, as you may have different career options that you expected at the start of this journey.

Chapter 7 bankruptcy

If your life has taken a different path, you might be wondering if you can discharge your student loan debt through Chapter 7 bankruptcy. In some cases, you may have that option.

Currently, you can discharge student loan debt if the bankruptcy court decides that forcing you to repay the student loan would cause undue hardship for you and anyone in your family that you take care of. Though there is not one hard-and-fast test for “undue hardship” or “extreme hardship,” the courts look at:

  • Whether you have been making an effort to pay back the loan so far
  • If paying the loan would keep you from a minimal standard of living
  • How long it would take you to pay the loan back at the minimal standard of living

Courts do not take this decision lightly. If they do rule that the loan would be an undue hardship, they may decide to discharge the loan fully or just in part.

Even if discharge is not an open path for you, there could be other ways to make student loan payments more manageable after bankruptcy, such as adjusting the interest rate or seeking deferment. Seek legal counsel to discuss your situation so your student loan debt does not rule your life.