If you've been told student loans can never be discharged in bankruptcy, you're not alone. It's one of the most common things people believe about debt — and it isn't true.
Why people think it's impossible
Most debts, like credit cards and medical bills, are wiped out automatically when you receive a bankruptcy discharge. Student loans are different. They are not discharged automatically. To get rid of them, you have to ask the bankruptcy court separately and prove that repaying them would cause you an "undue hardship."
For decades, that standard was treated as nearly impossible to meet. Many borrowers never tried. Many attorneys never suggested it.
What changed
In November 2022, the U.S. Department of Justice and the U.S. Department of Education announced a new process for federal student loans. Instead of fighting every case, government attorneys now review a sworn statement from the borrower — called an attestation — and decide whether to support discharge.
The process gives borrowers clear, published criteria. If your situation fits them, the government can agree that your loans should be discharged, in whole or in part. The bankruptcy judge still makes the final decision.
How it works, in short
- You are in a bankruptcy case, or you file one.
- Your attorney files a separate lawsuit in that case, called an adversary proceeding, asking the court to discharge your federal student loans.
- You complete the attestation, describing your income, expenses and efforts to repay.
- The government reviews it and tells your attorney its position.
- If the government agrees, the parties present an agreed judgment to the court.
Who it can help
The process is built for people whose finances genuinely can't support their loan payments — for example, people whose necessary expenses equal or exceed their income, people who are retired or disabled, or people who have been paying on their loans for many years without getting ahead.
What it doesn't cover
The attestation process applies to federal student loans held by the U.S. Department of Education. Private loans from banks and other lenders are handled differently, and our office does not handle them.
Find out if you qualify
The first conversation is free. If you'd like Mr. Shapiro to review your documents and tell you whether you qualify, that review costs $100 — and it's credited toward your fee if you hire us. Call 702-386-8600.