Can student loans be discharged in Bankruptcy? Technically, student loans can be discharged in bankruptcy (under certain circumstances) but, as a practical matter, it is almost impossible to have student loan debt discharged in bankruptcy, as a would-be lawyer recently learned.
On January 11, 2016, the U.S. Supreme Court refused to hear an appeal presented by a would-be lawyer trying to discharge in bankruptcy more than $260,000 in business and law school debt. The debtor in the case graduated from law school but repeatedly failed to pass the bar exam. In 2012 he filed a Chapter 7 bankruptcy stating he could not repay his student loan debt due to alcoholism, depression and a criminal record. He argued his circumstances made it impossible for him in getting a job. He lived with his mother, who supports their household with her Social Security benefits. [Read more…]