There may come a point when you realize you have no choice but to consider Chapter 13 bankruptcy. You don't qualify for Chapter 7, however, you know that you need some help in regards to getting your finances back on track.
It's easy to believe that Chapter 13 bankruptcy is the answer to all your problems. And while it may be able to help in some ways, such as allowing you to reorganize your debt, you need to remember this: Some types of debt don't come into play.
Generally speaking, Chapter 13 bankruptcy has no impact on student loan debt. In other words, even if you go through this process, you will still owe the same amount of student loan debt once it comes to an end.
Under Chapter 13 bankruptcy law, student loan debt is similar to priority debt. For this reason, it is expected to be paid in full, just the same as child support, spousal support and back taxes.
In most cases, it's next to impossible to convince the court to discharge student loan debt. However, you may be able to make your case if you have been paying for an extremely long time, if you have a permanent disability or if you are well below the poverty line.
You should not file Chapter 13 bankruptcy with the idea that you will be able to discharge your student loan debt. Even if you have to hold onto this debt into the future, there are other benefits of bankruptcy. You need to learn more about these before making your final decision.
Source: FindLaw, "Chapter 13 Bankruptcy Rules FAQ," accessed April 24, 2017