A lot of people never ask about discharging their student loans because of something they heard years ago. Here are six common myths.
Myth 1: "Student loans can never be discharged in bankruptcy."
They can. They aren't wiped out automatically like credit cards, but you can ask the bankruptcy court to discharge them by showing undue hardship. Since 2022, the Justice Department's attestation process has made that path clearer for federal loans.
Myth 2: "You have to be completely destitute."
Not necessarily. The government compares your income with standard living expenses. Many people with jobs still have necessary expenses that equal or exceed their income.
Myth 3: "If I missed payments, I can't qualify."
Missed payments don't automatically disqualify you. The government looks at your overall good faith, including efforts to earn income, manage expenses and contact your servicer.
Myth 4: "I had to be on an income-driven repayment plan."
Not enrolling in an income-driven plan isn't held against you if you have a reasonable explanation.
Myth 5: "My bankruptcy is over, so it's too late."
In many cases, a closed bankruptcy case can be reopened to file a student loan case. (Read more.)
Myth 6: "It will cost a fortune in legal fees."
Our fees are published up front. The first consultation is free. A $100 qualification review is credited toward your fee. A student loan case through the attestation process is a $2,500 flat fee, payable as $500 down and $250 a month, with no interest.
One honest caveat
No attorney can guarantee a result. The bankruptcy judge makes the final decision, and not every situation qualifies. But the only way to know is to ask.
Call 702-386-8600 for a free consultation.