Q: “Are Student Loans dischargeable in Bankruptcy?

A: “No.”

The general rule of the the United States Bankruptcy Law follows the “Iron Lung” Rule.  This means that if you are not in an iron lung, your student loan debt will not be discharged.  (This is not literally the rule, but it is the practical effect of the law and caselaw as applied in this country.)  Take the toughest hard luck story you can imagine, multiple it a few times, and then you might be in an area where someone could be eligible for a discharge of student loans.  Courts will always look first to income based repayments – even very small payments per month on large loans are preferable to courts rather than discharging these debts.

Everyone should be cautious and read all terms of any agreements. This includes parents co-signing for student documents. If in doubt, consult an attorney on this issue.  Everyone should take care in their decisions to incur student loan debt.  Many degree courses are very expensive and the job prospects do not justify the significant student loan expense.

If you think student loan debt should be dischargeable in bankruptcy, contact your Senators and Congressman and let them know your thoughts on the issue.


Call 651-704-9600 for a free attorney consultation.