Hello Sahabat, Let’s Learn About Private Student Loan Discharge in Bankruptcy


Private student loans are meant to provide financial assistance to students who need to pay for college or university. However, these loans can become a burden due to high-interest rates and long-term repayment plans. In some cases, private student loans can be discharged in bankruptcy. This process can help students who are struggling with debt to get a fresh start. In this article, we will explain what private student loan discharge in bankruptcy is and how it works.

What is Private Student Loan Discharge in Bankruptcy?

Private student loan discharge in bankruptcy refers to a process where a borrower seeks to have their private student loan debt wiped out through bankruptcy. When a person files for bankruptcy, their debt is either discharged (forgiven) or reorganized. Private student loans are generally not dischargeable in bankruptcy, but there are some exceptions.

Exception to Discharge: Undue Hardship

One of the exceptions to discharge for private student loans in bankruptcy is “undue hardship.” This means that the borrower must show that they cannot pay back the loan and maintain a minimal standard of living. The borrower must also prove that their financial situation is unlikely to improve in the future.

Standard to Determine Undue Hardship

The standard to determine undue hardship varies depending on the jurisdiction. However, most courts follow the Brunner Test, which consists of the following criteria:

– The borrower cannot maintain a minimal standard of living if they are required to repay the loan
– The borrower’s financial situation is likely to persist for a significant portion of the repayment period
– The borrower has made good faith efforts to repay the loan

Process of Seeking Discharge

To seek discharge of private student loans in bankruptcy, the borrower must file an adversary proceeding, which is a lawsuit filed within the bankruptcy case. The borrower must prove that the private student loans cause undue hardship, and the creditors can challenge the claim. It is essential to hire an experienced bankruptcy attorney to assist with the process.

Effect on Credit Score

Filing for bankruptcy can negatively impact a person’s credit score. However, if the borrower can successfully obtain a discharge of their private student loans through bankruptcy, it can help them get a fresh start and rebuild their credit over time.

Other Ways to Deal with Private Student Loan Debt

If a person cannot obtain discharge of their private student loans through bankruptcy, there are other ways to deal with the debt. These include:

– Negotiating with the lenders to lower the interest rate or establish a payment plan
– Refinancing the loans to obtain a lower interest rate or more favorable terms
– Seeking assistance from a credit counseling agency or financial advisor


In conclusion, private student loan discharge in bankruptcy is a process that can help borrowers who are experiencing undue hardship. While it is not easy to qualify for undue hardship, it is possible with the help of an experienced bankruptcy attorney. If you are struggling with private student loan debt, there are other options available as well. It is important to explore all options and seek assistance from a professional if needed.

Thank you for reading this article. We hope it has provided you with useful information about private student loan discharge in bankruptcy. If you have any questions or comments, please feel free to leave them below. See you in the next article!

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