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Phone: 703-204-2040
The Strong Law Firm, PC

It’s been years since I graduated, but I still owe a lot on my outstanding student loans. Will I be able to eliminate any of it if I file for Chapter 7 bankruptcy?

Unfortunately, it is extremely unusual for any outstanding student loans to be forgiven, even through Chapter 7 bankruptcy. 

The Bankruptcy Abuse Prevention and Consumer Protection Act states in no uncertain terms that any education-related loan that can be considered a tax deduction does not qualify for discharge.

In extreme circumstances, it is possible to file a motion for an undue hardship exception as part of a Chapter 7 bankruptcy case. In order to receive the exception, you will need to prove that you have tried your best to pay off the loan, that your financial situation will not get better, and that you can’t uphold even a very basic standard of living while repaying the loan. It is extremely unusual for Virginia bankruptcy court to grant the exception in cases where the individual is still physically capable of working.

You do have options for consolidating the loan, either through the lender or as part of the Chapter 13 repayment bankruptcy process. You may be able to receive a temporary deferral or renegotiate the terms of the loan without filing for bankruptcy. It is in your best interest to discuss your options for dealing with student debt with legal counsel experienced in financial law.

Is it time for you to deal with your debt and make a fresh start? The Arlington bankruptcy lawyers at The Strong Law Firm can help you better understand your options for dealing with Virginia, Maryland and District of Columbia debt. For a free and confidential consultation, call our offices today at 877-344-8189. Reach us online through the contact form above.
Michael Strong
Senior Attorney, Strong Law Firm