Will bankruptcy affect my student loan?

In response to a dramatic increase in the number of students seeking to avoid repaying their student loans through bankruptcy, a recent amendment to bankruptcy law has made all student loans, regardless of their age, non-dischargeable in any chapter of bankruptcy. Thus, filing bankruptcy will have virtually no effect on your student loans, unless you can show that repaying them would cause undue hardship on you and your family. Undue hardship tends to be very difficult to establish with the court, so if you’re considering bankruptcy to avoid paying the money you borrowed to go to school, you’ll most likely need to find other means to deal with the debt. Perhaps the most that bankruptcy can do in regards to student loans is discharge other debts so you can put more of your money towards paying off your loan. Some courts will allow you in a Chapter 13 case to pay a greater percentage of your student loan over other unsecured debts or reduce your monthly loan payments to an affordable amount. No matter how you choose to deal with your student loans, it’s important that you make it a priority to repay them on schedule. Any delinquency on your part can damage your credit report and affect your ability to receive new loans or grants in the future. Your tax refund as well as up to 10 percent of your wages can even be claimed to help repay your loan. Consider debt consolidation, negotiating with your lender, or asking for a deferment if you can’t discharge your student loans in a bankruptcy and you need help bringing them under control.