Janssen Law, PLC

Could I declare bankruptcy on my student loans?

Your student loans would probably not be eligible for discharge, regardless of whether you intend to pursue it through bankruptcy or another means of debt relief. That does not mean it is impossible to handle student debts. There might some avenues available to you if you are truly unable to address your loans, such as proving to an Iowa court that you have a unique situation.

Unfortunately, overwhelming student debt is far from unique; total discharge is, therefore, extraordinarily rare. Your other options could include prioritizing your debts or deferring your loans. Please read on for a brief explanation of these two alternatives.

The first and often most effective step towards managing your college loans would probably involve a total assessment of your financial situation. From the basis you established with this analysis, you could then decide on various strategies to manage or discharge your debts, such as bankruptcy and consolidation. This would probably be most effective if you had accrued significant unsecured liability with credit cards or similar financial products. Take a look at FindLaw's article on prioritizing debt for an in-depth description of this process.

Your second option might involve applying for deferment. This could be a good compromise; it could help you pay back debts later without exorbitant interest and fees. If, for example, you were contemplating attending graduate school or completing a professional certificate program in order to secure a high-paying job, deferment could give you the financial freedom to do so. 

Even in terms of student loans, you could have more options to deal with your debt than you think. Often, starting the process sooner rather than later allows you to reduce the future impact of your debt. Please consider this only as general information. It is not meant to be legal advice.

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