You’ve likely heard that you can’t use bankruptcy to get rid of student loan debt. However, you can get your student loans discharged in some instances. You’ll have to fulfill strict requirements and the process can be more complicated for student loan bankruptcy than it is for other forms of debt. If you’re a Texas resident and want to know how to get rid of student loans, here are some important things to know about bankruptcy.
Filing for bankruptcy for student loans
Using bankruptcy to get rid of student loans could get easier in the future. If the Fresh Start Through Bankruptcy Act of 2021, a recently introduced bipartisan bill is approved, people can file bankruptcy for their student loans a decade after their initial loan payment is due. The bill also makes it possible to utilize the existing undue hardship discharge available to people with private student loans and for federal student loans that have been due for less than a decade.
How student loan bankruptcy works
If you’re thinking about bankruptcy for student loans, getting behind on your loan payments could have a significant impact on your life. Your wages could be garnished if a lender takes out a judgment against you, and the federal government can retain your tax refund to bring your student loan debt down.
Your student loan debt is likely only one component of the monetary issues you may be facing. If student debt is your only issue, you might not be able to use bankruptcy to discharge your debt. Filing for this type of bankruptcy is complicated but could be a more successful path to financial well-being than continuing to try getting out of student loan debt on your own.