Many people wonder what happens to their student loans when they file bankruptcy. Are these loans discharged like unsecured credit? Or do you have to repay them like taxes and child support?

Are My Student Loans Discharged during Bankruptcy?

If student loans make up the majority of your debt, you may think that your loans will be discharged when you file bankruptcy. Unfortunately, this is often not the case. Unless you can prove that repaying the debt will cause "undue hardship", you will have to repay these loans.

The good news is that during bankruptcy you are protected from collection actions on your student loans. This means you aren't required to pay on them, but you do need to be aware that interest will continue to accumulate on them. So you may want to pay at least the interest, so that the balance due doesn't grow.

Alternatives to Bankruptcy for Student Loans

Since student loans aren't typically discharged, you should look into alternatives to bankruptcy if student loans make up most of your debt. You will have more options if you are not in default, including:

• Apply for deferment if you are still in school, on active duty in the military, are unemployed, have economic hardship or are temporarily disabled.
• Apply for forbearance if you do not qualify for deferment.
• Lower your payments with an income-dependent repayment plan.
• Find out if you qualify for loan forgiveness.
• Consolidate your loans.

If you are in default, you still have options available to you, including default repayment plans and loan consolidation. These can help you avoid collections and wage garnishment. It's in your best interest to pursue these options before filing bankruptcy.

Rebuilding Your Credit after Bankruptcy

If you have filed bankruptcy, you will want to rebuild your credit. One of the best ways to do this is through bk auto financing. As you make your payments on time, your credit scores will improve, which will make your financial future brighter.

Remember we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.