Debts
Can federal student loans be discharged in bankruptcy?
Only if you prove undue hardship. An ordinary Chapter 7 or Chapter 13 discharge does not wipe out federal student loans. To seek a discharge, you file a separate lawsuit inside your bankruptcy case, called an adversary proceeding, and show that repaying the loans would impose an undue hardship on you and your dependents. The bankruptcy judge makes the final decision.1 2 3
Start your student loan discharge journeyFederal student loans can be discharged, but not by filing alone. This guide explains the extra step the law requires, the Justice Department process for these cases, and what each chapter does in the meantime.
General information, not legal advice. Rules and amounts change; check with a lawyer or the court before you act.
In this guide
Which loans does this rule cover?
The student loan exception covers an educational loan or benefit overpayment that was made, insured or guaranteed by a governmental unit, or made under a program funded in whole or in part by a governmental unit or a nonprofit institution. Loans from the federal government fall in the first group.1
Private student loans are covered in a separate guide.
What happens to federal student loans in Chapter 7?
They pass through the case unless you take the extra step. Student loans are not discharged unless leaving them in place would impose an undue hardship on you and your dependents.1 4
While the case is open, the automatic stay stops most collection activity, including collection calls and letters. That pause ends with the case. It is not a discharge.5 6
The extra step is an adversary proceeding, which is a lawsuit within the bankruptcy case that begins when you file a complaint. Either the debtor or a creditor may file a complaint asking the court to decide whether a debt is dischargeable. For student loans there is no filing deadline: the complaint may be filed at any time, and if a closed case has to be reopened to file it, no reopening fee is required.2 5 7 8
How does the Justice Department process work?
In November 2022, the Justice Department and the Department of Education introduced a process for federal student loan discharge cases. The U.S. Trustee Program's student loan guidance page, updated March 17, 2026, still lists that guidance.2 9
- You file your bankruptcy case, then file the adversary complaint asking for a discharge of the loans.2
- You complete an attestation form, which helps the government assess your request.2
- Justice Department attorneys review it with the Department of Education. They look at whether you can pay now, whether that is likely to continue, and whether you have made good-faith efforts to repay.2
- The department decides whether to recommend a full or partial discharge.2
- The bankruptcy judge makes the final decision.2
Past non-payment, or not having enrolled in an income-driven repayment plan, does not automatically disqualify you under that guidance. The cases are handled by the U.S. Attorney's Office for the district where the bankruptcy is pending.2 9
What happens in Chapter 13?
Student loans are on the list of debts a completed Chapter 13 plan does not discharge. To the extent the plan does not pay them in full, you still owe them when the case ends.3 10
A plan usually lasts three to five years, and the loans can be provided for in it along with your other unsecured debts. A plan may group unsecured claims into classes but may not discriminate unfairly against any class, so whether a plan can favor student loans over other unsecured debts is a question for your court and your lawyer.10 11
The undue hardship lawsuit is available in Chapter 13 as well. The rule that lets a debtor file a dischargeability complaint at any time is not limited to one chapter.7 8 2
| Question | Chapter 7 | Chapter 13 |
|---|---|---|
| Does the ordinary discharge cover the loans?1 3 | No | No |
| What happens to collection during the case?5 | Most collection stops while the automatic stay is in place | Most collection stops while the automatic stay is in place |
| Are the loans paid in the case?4 10 | Only if the trustee has money to distribute to unsecured creditors | They can be provided for in the plan; the unpaid part is still owed afterward |
| How can the loans be discharged?2 | By proving undue hardship in an adversary proceeding | By proving undue hardship in an adversary proceeding |
What are the options outside bankruptcy?
Federal student loans have their own repayment options. They are set by federal law and handled outside the bankruptcy court.12
The repayment options changed recently. The One Big Beautiful Bill Act, signed July 4, 2025, created a new Repayment Assistance Plan to be in effect no later than July 1, 2026. Because the rules are in transition, check StudentAid.gov or your loan servicer for the plans open to you today instead of relying on older articles.12
What can change the answer?
The outcome depends on your own facts more than on the chapter you file.
- Your present ability to pay, whether that is likely to continue, and your good-faith efforts to repay. These are what Justice Department attorneys look at.2
- Who made or guaranteed the loan. The rule in this guide is about loans made, insured or guaranteed by a government, or made under a government-funded or nonprofit-funded program.1
- Whether you actually file the lawsuit. Without an adversary proceeding, the loans are not discharged.2
Common questions
Does filing bankruptcy automatically cancel federal student loans?
No. Student loans are not discharged unless you prove, in a separate adversary proceeding, that repaying them would impose an undue hardship on you and your dependents.1 2
Is there a deadline to ask for a student loan discharge?
The court rule lets a dischargeability complaint of this kind be filed at any time. If a closed case is reopened to file it, no reopening fee is required.7 8
Who decides whether my loans are discharged?
The bankruptcy judge. Under the Justice Department process, government attorneys review your attestation form and decide whether to recommend a full or partial discharge, and the judge makes the final decision.2
Do I have to have been on an income-driven plan first?
Not necessarily. Under the Justice Department guidance, not enrolling in an income-driven repayment plan does not automatically disqualify a debtor.2
Sources
Official courts & government references- 11 U.S. Code § 523(a)(8) (Cornell LII)
- DOJ: Student Loan Discharge Guidance: Fact Sheet (Nov. 17, 2022)
- 11 U.S. Code § 1328(a) (Cornell LII)
- Chapter 7 - Bankruptcy Basics
- Glossary of Legal Terms (uscourts.gov)
- 11 U.S. Code § 362(a)(3), (a)(6) (Cornell LII)
- Federal Rules of Bankruptcy Procedure, Rule 4007(a)-(b) (Cornell LII)
- Federal Rules of Bankruptcy Procedure, Rule 7001 (Cornell LII)
- U.S. Trustee Program: Student Loan Guidance
- Chapter 13 - Bankruptcy Basics (uscourts.gov)
- 11 U.S. Code § 1322(b)(1) (Cornell LII)
- FSA Partners: Federal Student Loan Program Provisions Effective Upon Enactment Under the One Big Beautiful Bill Act (July 18, 2025)