One advantage of a Chapter 13 bankruptcy is that you, not your loan holder will determine the size of your student loan payments.  You will make court-determined payments while you are in the Chapter 13 plan, usually for three to five years. You may still owe the remainder of your student loans when you come out of bankruptcy, but you can try at that  point to discharge the remainder based on undue hardship. While you are repaying through the bankruptcy court, there are no collection actions that can be taken against you. The advantage of a Chapter 13 is that your student loans may be either given priority or otherwise paid at the expense of your unsecured creditors. 

You may have other options, depending on how judges decide these cases in your judicial district.  For example, some judges allow student loan borrowers to give priority to their student loans during the Chapter 13 plan.  Assume that most bankruptcy lawyers are not knowledgeable in this area if he tells you that student loans cannot be discharged in bankruptcy. 

The Bankruptcy Manual discusses student loans and hardship discharge.  Download your free copy.   The Bankruptcy manual is for informational purposes only. The Bankruptcy Manual comes in rtf format for word or WordPerfect, pdf for adobe, or you can download the audio.

Kentucky Student Loan  Kentucky Hardship Discharge  

Indiana Student Loan Hardship Discharge  Bankruptcy Student Loan Hardship Discharge

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