You may have a better chance of discharging or settling a private student loan in bankruptcy than a federal student loan. The reason is that federal student loans offer income-driven repayment (IDR) plans while private student loans do not.

Are student loans dischargeable in Chapter 7?

Most debtors won’t be able to discharge (wipe out) student loan debt in Chapter 7 or Chapter 13 bankruptcy. However, if you can prove that repaying your student loans would cause an undue hardship to you, you can get rid of your student loans in bankruptcy.

Is there a limit on private student loans?

Since private student loans are offered by many different lenders, there is no general limit to how much you can borrow. Banks, credit unions and online lenders all have their own criteria. This means you’ll need to compare lenders, interest rates and repayment terms before applying for a private student loan.

Can a federal student loan be used for a private loan?

Private student loans are loans extended by private lenders that are not backed by the federal government. These loans are only to be used for qualified educational expenses. Private student loans don’t have many of the relief provisions allowed for by federal student loans.

How can I get rid of my private student loan?

The best way to reduce or eliminate your private student loans might be a debt settlement. It would be rare for a debt settlement company to attempt to negotiate a settlement for a private student loan. But, there are some student loan attorneys that specialize in such settlements.

What happens if you default on a federal student loan?

Federal student loans such as Stafford Loans and Plus Loans are guaranteed by the federal government. That means that if you default on these loans, the federal government pays for the loan. By contrast, if you default on a private student loan, the lender is out of luck.

Do you have to pass the Brunner Test to discharge a loan?

In most courts in America, you will need to pass the Brunner Test to discharge a student loan. The Brunner Test was originally created by the court in a case called Brunner v.