"While student loans are generally exempt from bankruptcy, the rules can be complex and sometimes blurred," says Karen M. Lynch, an attorney with Kelley Lockard & Associates.
Lynch notes that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 exempted certain types of student loans from discharge in bankruptcy. However, she warns that this exemption only applies to federal student loans and does not include private student loans or student loans secured by a property deed.
"Some states have laws that exempt specific types of student loans from bankruptcy," Lynch explains. "For example, California allows students who took out private student loans before 2018 to discharge them in bankruptcy."
"Additionally, some states may not recognize federal student loan discharges in bankruptcy proceedings," she notes.
"In these cases, the student or borrower may need to seek relief through other means, such as wage garnishment or asset liquidation," Lynch advises.
"It's worth noting that in June 2020, The New York Times reported on a case where a student was able to discharge their federal student loan debt through bankruptcy due to the COVID-19 pandemic," Lynch says.
"As with any complex issue, there may be variations in how different courts interpret bankruptcy laws regarding student loans," Lynch notes. "If you or someone you know is facing debt-related issues, it's essential to seek advice from a qualified attorney.
https://thyblackman.com/2020/06/11/can-student-loans-ever-be-part-of-a-bankruptcy-filing/