Since October 7, 1998 the only way that you can include a student loan in a bankruptcy is if you can prove that they are causing you an undue hardship. This is extremely hard to prove.

Any bankruptcy cases before October 17, 2005 if your student loan was given to you by a company that was insured or their aim was for profit or a non government entity you could include it in a bankruptcy. But if those that offered you and gave you the student loan was of a non profit organization or a government funded organization they could not be included in a bankruptcy.

To prove that your student loan is causing you an extreme hardship you must prove three specific points and if you prove all but one you will not have it included in the bankruptcy. The first one is that you have things in you circumstances that show that your current financial state will continue for a very large to all of the repayment period of the student loans.

Second, you have to make good faith effort to be able to repay your debts or your student loans. By making payments for several years and showing that you are trying or did try to pay off your debt. The only exception to this one is if you never had the ability to pay the loan in the past. Lastly you must show that you would not be able to continue based on income and expenses a minimum standard of living for those of your house hold and yourself if you were made to pay this loan off.

While in the bankruptcy court you may have the means to give what is called a partial discharge this is where you have shown because of your income and expenses that you would not be able to pay the entire loan but would be able to pay a portion of the loan. But even to get a partial discharge you must still meet all of the requirements that we have listed previously.

Those that decide what can be included in the bankruptcy and what can not be included will be based upon the decision of the bankruptcy judge. In many cases a ruling is really made by just a gut feeling.

Often times there are other alternatives in apply for bankruptcy on a student loan. Because the negative aspect of applying for bankruptcy with a student loan is that while you are in court your creditors don’t have the ability to send you bills, so if it ends up ruling not in your favor. That next month you would receive a bill will all have the interest and late payments that have accrued while you were waiting for the judgment in your bankruptcy case.

Student loans tend to be one of the most flexible loans out there they have more options that you can pursue then just a standard loan. If you see that you are not going to be able to pay back your loan talk to you lender. Let them know exactly what is happening and more often then not they would be able to help you out of that situation.

It is truly a difficult thing to dissolve your student loans after filing for bankruptcy. The only way that these types of loans can be wiped away through bankruptcy is if you can prove that they are a substantial hardship on you and your finances and this is a pretty hard thing to do in most cases.

Since the rest of your debts will be taken care of after your have filed for bankruptcy you will have to prove that there is no way you will be able to pay this debt according to the schedule that had been laid out prior.

The next step is a thing called “A Faith Effort” that you will have to prove. This means that you have not tried lying to your creditors and that you are working as much as you can to get the money that you need, yet you are still coming up short.

Also, the judge has a lot to say about it. What can be discharged and what cannot falls directly upon the bankruptcy judge. You might be fortunate to get a judge that allows for discharges and you might get away without having to pay off these loans or at least a part of the loans.

Out of all of your loans and bills, student loans are more flexible and have many options. If you find yourself having trouble paying off your student loans after bankruptcy, let your lender know. You need to tell them exactly what the problems are and they will most likely work with you.

If the thought of contacting the lenders scares you, you need to realize that they will respect you more for coming to them with the truth. And they will be more willing to work with you with different options for you to choose from to pay off your loan.

I need to let you know that a law changed in the fall of 1998 regarding the hardship of repaying student loans that many students use to fall back on. Student loans are no longer discharged in any chapter of bankruptcy unless you can prove that repaying the loan creates an undue hardship on you or your family.

Now a hardship usually requires showing that you cannot provide a minimum standard of living for you and your dependents if you have to repay the loan now. Like we talked about above, some courts will discharge part of the loan with proof that repaying would truly be that kind of a hardship.

Student loans can sometimes be unenforceable due to school closures, fraud, etc. Chapter 13 can provide a way to cure defaults on student loans, or to pay them off over the course of the plan.

Now some federal insolvency courts are allowing debtors (students with loans) to reclassify when filing for bankruptcy or chapter 13. This allows the debtor to pay more money to repay the loan rather than paying off the unsecured debts.

Student loan bankruptcy is no doubt changing and is in trouble. It is no longer possible to reduce your debts as it was in the past. Also, you can find out much more information regarding this subject by checking out the many sites available on the web, or calling your lender right away and explaining what is happening.