Can I Discharge My Student Loans in Bankruptcy in Pennsylvania?

If you’re a college graduate in Pennsylvania, and you’ve been struggling to stay current on your student loan bills, bankruptcy might offer a solution. However, bankruptcy can only eliminate student loan debt under specific circumstances, which means you will need to meet strict criteria to qualify. To learn more about getting rid of debt in Pennsylvania, contact the Philadelphia bankruptcy lawyers of Young, Marr, Mallis & Associates for a free consultation today.

How Does Bankruptcy Affect Student Loans?

Earning a college degree provides students with more opportunities to develop marketable skills and earn higher income after graduating. However, depending on which college or university the student attends, a degree can also be extremely expensive. Costs of education are climbing across the United States – especially here in Pennsylvania, which has one of the highest average student debt loads in the country. On average, college graduates in Pennsylvania owe nearly $36,200 – roughly twice the average amount owed in Utah, which has the lowest debt load.

Considering statistics like these, it’s hardly surprising that college graduates in Pennsylvania might look for ways of obtaining debt relief or lowering their monthly student loan payments. The question is, can bankruptcy get rid of student loan debt? And if so, under what circumstances? Our Montgomery County bankruptcy lawyers have the answers.

What Happens to Student Loans in Chapter 13 Bankruptcy?

Chapter 13 is the second most common type of personal bankruptcy after Chapter 7, which our Bucks County bankruptcy attorneys will discuss in the next section. For now, let’s focus on what happens to student loan debt in Chapter 13.

When you file Chapter 13 bankruptcy in Pennsylvania, you must enter a payment plan that lasts from three to five years, depending on your disposable income. This payment plan includes terms for repaying various debts, with some debts receiving higher priority than others. When you complete the plan, your remaining dischargeable debts can be wiped out, which is called a “discharge.”

Unfortunately, student loan debt is not dischargeable in Chapter 13 – at least, not in most situations. That means, for most Pennsylvania college graduates, filing for bankruptcy will not offer relief from student loan obligations.

However, there are rare exceptions to this rule. If a graduate can prove that his or her student loans are causing undue financial hardship, it may be possible to have the debts wiped out.

How to Prove Undue Hardship for Student Loans in Bankruptcy

To prove that your education loans are causing you to experience financial hardship, you must pass the “Brunner test,” which involves three criteria. These criteria are that:

  1. Paying off your normal student loans makes it impossible for you to maintain a basic standard of living, considering your expenses and income.
  2. Your financial situation is unlikely to change during the loan repayment period.
  3. You have made sincere efforts to pay off the loans to the best of your financial ability.

If it is not possible to wipe out your student loan debt with Chapter 13, filing bankruptcy may alleviate the financial strain in other ways. For example, you may include your student loan payments in your Chapter 13 reorganization plan, which could enable you to make lower monthly payments.

Chapter 7 Bankruptcy and Student Loans

Chapter 7 is the most common type of bankruptcy in the United States. Unlike Chapter 13, Chapter 7 bankruptcy does not include a payment plan. Instead, a bankruptcy trustee will liquidate the debtor’s nonexempt assets – in other words, sell nonexempt property – to repay creditors. However, bankruptcy exemptions can be used to protect various possessions and pieces of property, potentially including homes and vehicles. Filing for Chapter 7 does not always mean you will have to give up your house or car.

While Chapter 7 lacks a payment plan, there is one feature it shares with Chapter 13: student loan debt is typically non-dischargeable in Chapter 7 bankruptcy, meaning Chapter 7 does not wipe out student loans. However, depending on the debtor’s ability to meet the Brunner test requirements above, it may be possible to discharge student loan debt in some exceptional cases. A Chapter 7 bankruptcy lawyer from Young, Marr, Mallis & Associates can help you determine whether Chapter 7 is an appropriate option for your situation.

Philadelphia Bankruptcy Lawyers for Student Loan Debt

At the law offices of Young, Marr, Mallis & Associates, we understand that filing for bankruptcy is a major financial decision. We are here to provide legal guidance at every step of the way, so that you can make informed decisions about managing your finances. We have more than 30 years of experience helping thousands of clients file bankruptcy in Pennsylvania, and our dedicated team of Chapter 13 bankruptcy lawyers is ready to assist you with Chapter 13, Chapter 7, or even filing for bankruptcy a second time.

If you’re struggling with excessive debt, find out whether bankruptcy could be the right solution. For a free legal consultation about bankruptcy in Pennsylvania, contact the law offices of Young, Marr, Mallis & Associates online, or call our Philadelphia bankruptcy attorneys today at (215) 701-6519.

Related Articles

The Bankruptcy Process

Many people live paycheck-to-paycheck or have minimal savings. These circumstances mean that even a small financial setback could result in a crisis. When you cannot pay your utility bills, mortgage, […]

Read More »

How Bankruptcy Can Protect You

Filing for bankruptcy is often thought of as a sign of failure. At best, it is seen as a last resort when faced with too many bills, collection letters, or […]

Read More »

Means Testing in Chapter 7 or Chapter 13 Bankruptcy

Bankruptcy has many layers. Before filing, a potential debtor will have to gather their bills, bank statements, tax returns, and proof of all household income for the previous six months. […]

Read More »

Have an Attorney Review Your Case for Free

Get a Free Case Evaluation

Contact Our Attorneys To Learn How We Can Help Your Case


12 Convenient Locations Across Pennsylvania and New Jersey

Philadelphia, PA

7909 Bustletown Ave, 1st Floor Philadelphia, PA 19152 (215) 607-7478 Get Directions

Quakertown, PA

328 Broad St. Quakertown, PA 18951 (215) 515-6876 Get Directions

Allentown, PA

137 N 5th St. Suite A Allentown, PA 18102 (215) 240-4082 Get Directions

Jenkintown, PA

135 Old York Road Jenkintown, PA 19046 (215) 544-3347 Get Directions

Easton, PA

101 Larry Holmes Dr. #212 Easton, PA 18042 (215) 515-7077 Get Directions

Bala Cynwyd, PA

2 Bala Plaza, Suite 300 Bala Cynwyd, PA 19004 (610) 557-3209 Get Directions

Bensalem, PA

3554 Hulmeville Rd, #102 Bensalem, PA 19020 (215) 515-6389 Get Directions

Plymouth Meeting, PA

600 W. Germantown Pike #400 Plymouth Meeting, PA 19462 (215) 515-6876 Get Directions

Harrisburg, PA

2225 Sycamore St Harrisburg, PA 17111 (717) 864-8887 Get Directions

Cinnaminson, NJ

909 Route 130 South #202 Cinnaminson, NJ 08077 (609) 796-4344 Get Directions

Hamilton Twp., NJ

100 Horizon Center Blvd., 1st and 2nd Floors Hamilton Township, NJ 08691 (609) 236-8649 Get Directions

Marlton, NJ

10000 Lincoln Drive E One Greentree Centre, Suite 201 Marlton, NJ 08053 (856) 213-2805 Get Directions

Piscataway, NJ

200 Centennial Ave. Suite 200 Piscataway, NJ 08854 (908) 367-7256 Get Directions