Guiding You Toward A Brighter Financial Future

It may get easier to discharge student loans through bankruptcy

On Behalf of | Mar 29, 2018 | Chapter 7

Many Chattanooga residents take out student loans in order to finance their higher educations. However, at present it is very difficult for Tennessee residents who hold federal student loans to eliminate those burdens in bankruptcy. That is because in order to do so, a debtor must show that the repayment of their student loans subjects them to undue hardship. The biggest problem in accomplishing this is that the government has never clearly explained what an “undue hardship” in this context is.

An undue hardship in this area of bankruptcy law has generally been understood to mean a person could not meet their basic needs and make their payments at the same time. However, the undefined nature of the term has made it next to impossible for men and women swamped with student loan debt to get out from under their burdens with bankruptcy.

Government officials recently announced, though, that they may take active steps to better define “undue hardship” in the context of student loan discharge through bankruptcy. It is possible that a broader interpretation of the term may give more people the opportunity to discharge their overburdening student loan debt and set their lives on solid financial footing than ever before.

For now, however, most people may still face challenges relieving themselves of their student loans through bankruptcy. Individuals may have success negotiating repayment options with their lenders or seeking deferments of their payments; debt relief options are available for many forms of financial obligations including student loans, and those who need support as they work toward financial freedom can seek the assistance of attorneys who work in the bankruptcy field.

Source:, “You soon may be able to declare bankruptcy on your student loans – here’s how,” Abigail Hess, Mar. 22, 2018