If you have student debt and plan on filing bankruptcy anytime soon, don’t count of the government to bail you out of you education loans. Per federal law, education loans from both the private and federal sectors cannot be discharged in a bankruptcy. According to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, all education loans are protected from bankruptcy. Under certain circumstances, this restriction may not apply. However, the borrower must prove that he or she faces an “undue hardship” when making a loan payment. Unfortunately, the odds of actually proving undue hardship are quite low, so most borrowers end up repaying any education loan debt they may have.

If you have education loans, however, don’t give up just yet. Borrowers who file Chapter 13 bankruptcy can ask to have their loans consolidated with the rest of their bankruptcy debt. In a Chapter 13 filing, the borrower must repay the debt via a payment plan that lasts between three and five years. Most likely, the student loan debt will not be paid off during this timeframe, however it will lower the amount the borrower owes. A new repayment plan on the education loans will begin following the conclusion of the bankruptcy plan.

The borrower can also dispute the amount loan lenders claim is owed on the education loans. This is because an education loan that is transferred between lending institutions many times – which is not an uncommon practice – can lose its true amount due. By filing an objection to the institution’s claim, the borrower may convince the court to knock off some of the debt due on the loan.

Financial aid experts recommend borrowers who are struggling financially contact their lenders directly before heading to bankruptcy court. Most lenders offer flexible repayment plans, student loan consolidation options, and hardship deferments that can help keep the borrower afloat during a particularly touch time.

Learn more about education loans at EducationLoans.org