Is There Any Hope for My Son to Bankrupt His Private Student Loans?

“Dear Steve,

My son has about 150,000 in private student loan debt. Which I feel is my fault as I filled out the paperwork and told him never to worry we would work it out and then the 2008 collapse.

Could you recommend the best course of action for dealing with these. Filling for bankruptcy with an attorney or on our own.


Dear Steve,

I have some news for you and I wish it was better.

Currently there is no mandatory program that any private student lender has to work with you to create an affordable repayment option like federal loans offer.

Up until 2005, private student loan debt was easily dischargeable in bankruptcy. The banks lobbied hard to make the change to make it harder to discharge private loans in bankruptcy. Afterwards, they started passing out loans like mints.

I’m not sure there are comforting words I can offer to you now that you might have not already discovered from lessons painfully learned. You must be feeling a tremendous amount of guilt and angst over this and you obviously have a desire to help hime find some solution.

For purely unmanageable student loans, the solutions fall into a few buckets. The first is to consider a strategic default where you just stop making payments on these loans in hopes of coming to a negotiated settlement.

Recently, an attorney stopped by to post Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan. It contains some good tips.

If you are looking for an experienced coach to help you with this approach, contact Damon Day.

The second bucket is to review and see if the loans might have been for more that educational expenses and/or for a non-accredited school. Those loans are much easier to eliminate in bankruptcy.

A lesser attempted solution here would be for your son to consider filing bankruptcy and then an Adversary Proceeding to challenge the student loan debt. There are people either having their loans reduced or eliminated after making a best effort to repay using this approach. The arguments are that there is no way out of the debt and they pose an undue hardship and the loans are simply going to be so unmanageable that the borrower will never be able to make meaningful payments.

See also  I've Struggled With Mental Health Issues and Student Loans and I'm Thinking of Bankruptcy - Jenny

In one such case (13-01001), a debtor was able to have the court eliminate $89,654 in Sallie Mae student loan debt. In another case (13-01005), $152,820 of Sallie Mae debt was eliminated for similar reasons.

The Adversary Proceeding route is expensive and not many bankruptcy attorneys are willing to fight that battle. So the short answer is there amy be a reasonable shot at reducing or eliminating the loans based on your sons income and attempts to make a good faith effort to repay. But be prepared to have to pay a bankruptcy attorney a lot more money to take on the fight.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Do you have a question you'd like to ask me for free? Go ahead and click here.
Damon Day - Pro Debt Coach

Follow Me
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
Steve Rhode
Follow Me

1 thought on “Is There Any Hope for My Son to Bankrupt His Private Student Loans?”

Leave a Comment