If your financial situation is in dire straits, you might have no choice but to declare bankruptcy. Student loan bankruptcy is no different from Chapter 7 or Chapter 13 bankruptcy. In most cases, student loan debt can’t be discharged when you file for bankruptcy. Judges typically don’t allow it and you have to file a separate proceeding called a Complaint to Determine Dischargeability or an Adversary Proceeding to even be considered for it. However, you will have to prove undue financial hardship, which includes proving that repayment of your student loans will make it hard to maintain even a minimal standard of living, and that would continue if you were required to repay the loan. You would also have to prove that you previously made a good-faith effort to repay the loan in the past, before you filed for bankruptcy.
Those who file the Complaint to Determine Dischargeability are successful 40% of the time. Of those who are successful, they are more likely to be unemployed, have medical hardships and more likely to have had a lower income in the year before they filed for bankruptcy. If it’s not successful for you, you may have to seek out some other kind of student loan assistance. It’s a lot of work, but it may be worth it in the end.