It’s not impossible to get your student loans discharged in bankruptcy, but it’s not exactly easy, either. Most people who file bankruptcy will still have those debts when they’re done.
If your student loans are a major source of your financial distress and are unlikely to be discharged, is there any point in filing bankruptcy? Quite often, yes. Here’s what you should think about:
Eliminating your credit card debt can help you afford your student loans
The odds are high that you didn’t make it through your years in higher education on just your student loans. You probably have a few credit cards that covered books, car repairs, clothes or the occasional night out with your friends.
You may have added to your debt when you moved out on your own and got your first place. It’s not uncommon for people to find that they have a lot of small bills each month that really add up. Plus, you may have more than a few medical bills that have accumulated over the years, and each of those requires payments every month if you want to stay out of collections.
Bankruptcy, in the form of Chapter 7, can help you erase all of your unsecured debt. In turn, that frees up a lot more of your income that can then be used to pay back your student loans.
While President Biden has signaled a willingness to cancel some or all government-backed student loans as a way to relieve a lot of debt and boost the economy, there’s no guarantee when or if that will happen. If you’re tired of struggling financially every month because there’s not enough money to pay all your bills and your student loans, find out more about your debt relief options.