PERSONAL EXPERIENCE: Student Loans After Bankruptcy Are Manageable

Posted by Wesley Scott on February 10, 2015 at 8:00 AM
Wesley Scott

student_loans_after_bankruptcyHere at Kain & Scott, one of the most common debts that our clients struggle with is their student loans. Unfortunately, in most cases, student loans are not dischargeable in a bankruptcy case. You may think there is no hope in solving your student loan issues, but we want to assure you that bankruptcy CAN help you. Read on to hear a personal experience from a client who had unmanageable student loan debt.

My Student Loans in Chapter 13 Bankruptcy

When I met with my bankruptcy attorney at Kain & Scott, I felt as if there was no hope.  I was severely in debt with high credit card balances, a pending foreclosure on my home, a car payment that I could not afford and student loans that I could not pay. My attorney explained that because of my income, I did not qualify to file a Chapter 7 bankruptcy but that a Chapter 13 case would allow me to reorganize my debts and give me the relief I needed.  He explained that even though I would still owe my student loans after bankruptcy, the Chapter 13 case would offer several benefits that would help me manage them in ways that I could not while burdened with my other debts.

After meeting with my bankruptcy attorney, I felt confident that I had found a way to solve my debt problems and to get my finances back on track.  Through my Chapter 13 bankruptcy plan, I was able to save my home by repaying the past due payments through the bankruptcy. I was also able to pay off my vehicle loan through my bankruptcy plan at a lower interest rate and monthly payment.  At the end of my bankruptcy case, my vehicle was paid in full and my mortgage was current.

My credit card debts were included in my bankruptcy plan as unsecured debts.  Each creditor received a percentage of the amount I owed to them.  After I made all of my bankruptcy payments and received my bankruptcy discharge, the remaining balances on my credit cards were discharged.  I was not legally responsible for the remaining balances. 

My student loans were included in my bankruptcy even though the student loans were not subject to a bankruptcy discharge.  The loans were deferred, meaning that I did not have to pay any monthly payments until the bankruptcy case was closed.  Because student loans are unsecured debts, the student loan company received payments equal to the same percentage that my other unsecured creditors received.  I was free to continue making my student loan payments during the bankruptcy or I had the option to wait until the bankruptcy case was closed before resuming payments.  I chose to make interest only payments during the bankruptcy case but I was not required to do so.

My Student Loans After Bankruptcy

Upon completion of my Chapter 13 bankruptcy plan, my unsecured debts, with the exception of my student loans, were discharged. My mortgage payment was current and my vehicle loan was paid in full. The only debts that remained after my bankruptcy were my mortgage and my student loans.  During the bankruptcy case, I learned about budgeting and saving for emergencies through my Debtor Education Course.  I applied what I learned to create an emergency savings account and monthly budgets to help me spend less than what I earned each month.

I had been paying a bankruptcy plan payment each month for five years.  After my bankruptcy case was closed, I simply transferred this amount to my student loans in my monthly budget.  In fact, the bankruptcy payment was higher than my student loan payments and by paying the higher amount toward my student loans, I am paying off my loans faster while accumulating less interest.  My Chapter 13 bankruptcy case gave me the opportunity to reorganize my debts while my student loans were in deferment so that I could easily afford to repay my student loans after bankruptcy.  If I had not filed bankruptcy, I do not know where I would be right now.

Bankruptcy was the best solution for my financial problems and my attorney helped make the process easier by supporting me through each step.  I still owe student loans after bankruptcy; however, filing bankruptcy gave me the ability to repay my student loans while keeping my home and comfortably paying my living expenses.


If you are like thousands of others living with unmanageable student loan debt while struggling to pay your other bills, bankruptcy could be the solution you need. In most cases you will not be discharged of the student loan debt, but you will be relieved of your other unsecured debts which will make paying your loans more manageable. For more information about what to expect during your bankruptcy consultation, download a copy of our free Bankruptcy Consultation eBook.

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Topics: Bankruptcy, Student Loans

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