Can i discharge private student loans

Click here to read more about how we use cookies. Shane Ramsey. To embed, copy and paste the code into your website or blog:. But the court determined that if Congress had intended that passage to cover private student loans, it would have said so more explicitly in adopting the language of the code section: [I]f Congress had intended to except all educational loans from discharge under Section a 8 A ii , it would not have done so in such stilted terms … There are educational benefits that students may become obligated to repay — such as conditional grants — which fit the statutory text more naturally.

Send Print Report. Published In: Borrowers. Many of these organizations offer advice for free. In some cases, you may need to pay a fee, as with a certified nonprofit credit counseling agency or if you hire an attorney. None of the organizations above calls, texts or emails borrowers with offers of debt resolution.

Offers of help that you have not sought out are likely to be scams. Avoid any debt relief companies that demand money upfront. If you need solutions for your student debt:. Why student loan discharge in bankruptcy poses a challenge. How to strategize private student loan discharge in bankruptcy. If you need additional student loan help. Discuss repayment options. Take a temporary payment pause.

Student loan help resource. Best for. On a similar note Dive even deeper in Student Loans. Explore Student Loans. Spot your saving opportunities. Reuters - A New York-based federal appeals court on Thursday said that private student loans are not protected from discharge in bankruptcy. In a page decision , a three-judge panel of the 2nd U.

Circuit Court of Appeals upheld U. After graduating from Emerson College, the borrower, Hilal Homaidan, filed for Chapter 7 bankruptcy in New York and obtained a discharge in of his loans. Navient, succeeding Sallie Mae as the loan servicer, sought repayment of them in any case. Homaidan paid the loans back, but in reopened his bankruptcy case to file a putative class action against Navient accusing it of a pattern of demanding repayment on loans that were discharged in bankruptcy.

Navient, represented by McGuireWoods, argued that those words encompass not only government loans but private student loans as well, while Homaidan argued that it only applies to a narrow group of conditional grant payments. The 5th and 10th U. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers.

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But discharging a private student loan in bankruptcy can be a tricky and often impossible process. Read on to learn how the process works now and how recent court cases and pending legislation in Congress might give overwhelmed student borrowers more solutions in the future.

Before , borrowers could discharge private and federal student loans in a bankruptcy, just like credit card debt or medical expenses. But the introduction of the U. Bankruptcy Code in caused a major shift with regard to student debt.

At the time, the intent of Congress was to protect educational loans from bankruptcy abuse.