Can I put my student loans under bankruptcy or disability payments? 17 Answers as of October 03, 2011

It not an administrative law judge but a U.S. Bankruptcy Judge. The Bankruptcy Court is a branch of the U.S. District Court for the district where you reside. You need to file your bankruptcy case and then file a lawsuit inside the bankruptcy case called an adversary prooceeding. In that lawsuit you will have to prove that because of circumstances beyond your control you will never be able to pay the students loans or any significant part of the debt. You will also have to prove that you have done everything in the world, including taken advantage of all the programs offered by the lender, to pay. You need to hire an attorney with experience in these types of proceedings and have the money to pay the attorney. The lender will fight your lawsuit so it will be costly and take time for the matter to be decided. You have to be ready to defend the case on appeal if you win. Being on Social Security permanent disability, particularly if for a few years, and if you tried deferments, extensions, etc. will be very favorable to your case.

An administrative law judge does not have the authority to issue an order saying that you dont make enough money to pay back your student loans. If such an order were issued, it would be unenforceable and should be ignored by whomever you are supposed to pay back your student loans to. Students loans in general are not dischargeable through bankruptcy. However, in very rare circumstances, they can be partially or fully dischargeable. Theres a test you would need to pass in order to have that happen. But this is absolutely not something that you can handle on your own. You need not only an attorney, but an experienced attorney who is aware of how this particular exception might apply to you.

Generally this is almost impossible, however, my firm is currently working on using the "extreme hardship" possibility to make this possible. This is developing law and somewhat uncharted territory. Previously federally backed student loans were non-dischargeable and privately funded student loans were dischargeable. Now all student loans are non-dischargeable unless of a case of extreme hardship. As there is little case law to elucidate all the issues surrounding this it is still a pending issue here.

As a general rule, student loans are non-dischargeable. You MIGHT, depending on the disability be one of the rare people who could do a hardship discharge in a Chapter 13. See a lawyer to see if you qualify.

If you can demonstrate payment of the loans will impose an undue hardship on you and your dependents, you may be able to get them discharged. Normally the courts look for a showing that you do not have enough income to sustain the cost of daily life and still make payments on the loan. You must also show that your circumstances are not likely to change for a significant part of the loan repayment period. Finally, you must show you have made good faith efforts to repay the loan. Given the circumstances you describe, it is very possible a bankruptcy judge would rule that you do not have to pay back your student loans.

If you are permanently disabled, you may be able to obtain a discharge of student loans in bankruptvy. Contact a charity organization such as the Legal Services Corporation to help you. This will be almost impossible to do without an attorney and if you qualify you probably cannot afford any attorney who has to work for a living.

Student loans are not dischargeable in bankruptcy, unless you file a special motion with the bankruptcy court. To date, in Riverside bankruptcy court such a motion has never been granted.