Can You File Bankruptcy on Student Loans? (Adversary Proceeding Guide)

Chapter 7 vs. Chapter 13 for Student Debt

When filing bankruptcy involving student loans, understanding the distinction between Chapters is essential:

• Chapter 7 Liquidation: Wipes away unsecured credit card debt and medical bills in 3 to 6 months. To clear student loans, your attorney must file a separate Adversary Proceeding (AP) complaint under Federal Rule of Bankruptcy Procedure 7001.
• Chapter 13 Reorganization: Restructures debts into a court-supervised 3-to-5-year repayment plan. Student loan monthly payments during Chapter 13 can be tied directly to disposable income, halting interest accumulation and collection actions.

The Adversary Proceeding Workflow

1. File the Primary Bankruptcy Petition: Establishes the automatic stay under 11 U.S.C. § 362, immediately freezing garnishments and collections.
2. File the Adversary Complaint: Names the Department of Education or private lender as a formal defendant.
3. Submit the 2022 DOJ Attestation Form: Itemizes income, expenses under IRS standards, and repayment history.
4. Stipulation of Discharge: If the DOJ confirms eligibility, both parties file a stipulated judgment granting partial or complete discharge without an adversarial trial.

Compare your options: model payments under the SAVE Plan to determine whether income-driven relief makes bankruptcy unnecessary.