I Know Students Loans Don't Discharge, So I Don't Have to List Them, Right?

Um, not so much. Section 521 of the bankruptcy code requires a debtor to list all of their debts in their bankruptcy schedules. It doesn't matter what you intend to do with the debt, or if the debt wouldn't discharge anyway. The debt must be listed, so notice can be given to the creditor.

Okay, so you have to list the student loan in your bankruptcy schedules, and you know they will (with a few rare exceptions) survive your bankruptcy and be there at the end of your case. What can you do with them? The answer, as always in bankruptcy law, is it depends on what you are filing.

If you file a Chapter 7, there isn't much to do in the case of the student loans. The case will likely be over in a few months, and you will go back to doing what you were doing before the case started.

You aren't currently up-to-date on your student loan payments? Well, consider these options:

• Change your repayment option. The student loan programs have several ways to approach repaying your loans, including extended repayment periods up to 30 years, graduated repayment plans, income contingent repayment, or income based repayment. Contact your federal student loan program for more details.
• Consider a deferment. If you are going back to school, for instance, you may be eligible for a payment deferment. The requirement to make payments is temporarily stopped, but interest will likely still accrue on your loans.
• Forbearance. If you have a financial hardship (and a bankruptcy client may very well have one), you may be eligible for reduced or eliminated payments, but once again, some interest (on non-subsidized loans) may still accrue.
• Consolidation. If you have loans with several agencies, or simply several loans, you may be eligible for consolidation, which will give you only one payment per month, and may gain you a break on the interest rate. Not all loans are eligible to be consolidated, however, and you should carefully examine the terms of any proposed new loan.

If you file a Chapter 13, there are several options to consider. In some districts (including one of mine), there are explicit options in a Chapter 13 plan to allow a debtor to continue to pay the monthly payment and to help catch up on arrears on the loan. Sometimes, however, the requirements of the plan are such that it isn't possible to make both the plan payment and the loan payment each month. In that case, you may be able to simply treat the student loan like any other unsecured creditor (like a credit card), with the understanding that it will be there, with interest, at the end of the Chapter 13.

As always, talk to a qualified, licensed attorney before deciding on what is right for you. A student loan isn't going away, and you need to plan for it before you file a bankruptcy, so you can have it under control along with the remainder of your finances.