Bankruptcy – Student Loan Relief Options When Discharge Is Not Available
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Many borrowers believe that if their student loans cannot be discharged in bankruptcy, there is nothing they can do. That is not true. While student loan discharge is difficult and requires meeting strict legal standards, bankruptcy and consumer law still offer important tools to manage, reduce, or stop the harm caused by student loan debt.
At Ginsburg Law Group, we help borrowers understand their real options when student loan discharge is not available and take steps to protect their finances, income, and credit.
Why Most Student Loans Are Not Discharged in Bankruptcy
In most cases, student loans are not automatically discharged because federal law requires borrowers to prove “undue hardship.” This is a high legal standard that often involves:
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Long-term inability to repay
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Minimal standard of living if forced to pay
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Good-faith repayment efforts
Many borrowers do not meet this standard, or the cost and complexity of litigation makes discharge impractical.
However, bankruptcy can still provide meaningful relief even when student loans survive the case.
How Bankruptcy Can Still Help With Student Loans
Even when student loans are not discharged, bankruptcy may still help by:
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Stopping collection lawsuits
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Halting wage garnishments
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Pausing aggressive collection efforts
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Freeing up income by eliminating other debts
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Providing leverage to address loan servicing issues
For many borrowers, bankruptcy creates financial breathing room that makes student loan repayment more manageable.
Option 1: Eliminate Other Debt to Afford Student Loan Payments
One of the most effective strategies is using bankruptcy to eliminate or reduce other debts, such as:
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Credit cards
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Medical bills
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Personal loans
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Collection judgments
By removing these obligations, borrowers can often:
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Re-enter income-driven repayment plans
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Avoid default
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Prevent future collection actions
This is especially helpful for borrowers whose student loan balance is manageable only if other debt is removed.
Option 2: Stop Wage Garnishment and Collection Activity
Student loan creditors — including federal and private lenders — may use aggressive collection tools, including:
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Wage garnishment
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Bank levies
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Tax refund interception
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Lawsuits (private loans)
Filing bankruptcy triggers the automatic stay, which immediately stops most collection activity. While the loans may remain, the relief from ongoing enforcement can be significant.
Option 3: Address Private Student Loan Violations
Private student loans are not always treated the same as federal loans. Many borrowers have private loans that:
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Are improperly classified as “student loans”
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Do not meet the legal definition required for non-dischargeability
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Involve servicing or collection violations
In some cases, consumer protection claims may exist, including:
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Improper collection practices
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Misrepresentation
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Credit reporting errors
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FDCPA violations
These issues can sometimes result in settlements, account corrections, or leverage in negotiations.
Option 4: Bankruptcy as a Tool to Regain Control
Even without discharge, bankruptcy can:
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Prevent escalation of default consequences
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Stop lawsuits while you explore repayment or relief options
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Allow time to address servicer errors
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Create a structured financial reset
For many borrowers, the goal is not immediate discharge — it is stability and control.
Option 5: Evaluate Eligibility for Hardship-Based Relief
While discharge is difficult, some borrowers may still qualify for:
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Partial hardship relief
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Modified repayment strategies
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Long-term relief planning based on income, disability, or age
A proper legal review can help determine whether pursuing hardship-based relief is realistic or whether other strategies make more sense.
Common Misconceptions About Student Loans and Bankruptcy
“Bankruptcy is pointless if student loans aren’t discharged.”
Not true. Bankruptcy often helps indirectly by eliminating other debt and stopping collections.
“I’ll lose my chance at repayment programs if I file bankruptcy.”
In most cases, borrowers can still pursue income-driven repayment or other options after bankruptcy.
“Nothing can stop student loan garnishment.”
Bankruptcy can stop garnishment immediately through the automatic stay.
Frequently Asked Questions
Can bankruptcy stop student loan wage garnishment?
Yes. Filing bankruptcy triggers the automatic stay, which can stop garnishment while the case is pending.
Will bankruptcy hurt my chances of future relief?
Not necessarily. Many borrowers pursue repayment or relief options after bankruptcy once their finances stabilize.
Are private student loans treated differently?
Yes. Some private loans may be improperly classified or subject to consumer protection violations.
Should I file bankruptcy if student loans are my biggest debt?
Possibly — but only after reviewing your full financial picture. Eliminating other debt can make student loans manageable.
Talk to a Lawyer About Student Loan Relief Options
If you are overwhelmed by student loan debt and believe discharge is not an option, you still deserve honest guidance and real solutions.
Ginsburg Law Group helps borrowers understand how bankruptcy and consumer protection laws can be used strategically — even when student loans survive the case.
📞 Call us today for a free, confidential bankruptcy consultation – 855-978-6564 or email us at bankruptcy@ginsburglawgroup.com.
Contact our Bankruptcy Team: bankruptcy@ginsburglawgroup.com
We work with most major legal services and legal insurance plans. Some cover your legal fees for bankruptcy services. Give us a call today to see if your bankruptcy is covered!
BANKRUPTCY TEAM
AMY GINSBURG – aginsburg@ginsburglawgroup.com
GRACIE KLEIN – gklein@ginsburglawgroup.com
NICOLE LOMBARDI – nlombardi@ginsburglawgroup.com
