If my daughter has $60,000 in student loans and I’m a co-signer on some, is there any way that she can declare bankruptcy and be relieved of them?

UPDATED: Mar 2, 2015

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If my daughter has $60,000 in student loans and I’m a co-signer on some, is there any way that she can declare bankruptcy and be relieved of them?

They are draining every resource and are a profound burden.

Asked on March 2, 2015 under Bankruptcy Law, Rhode Island


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

It is *very* unlikely that she can discharge these in bankruptcy if they are in any way government backed or insured. That's because the government makes the bankruptcy rules and, not surprisingly, doesn't want people to use them to get out of paying the government money. A government backed or insured student loan can only be discharged if not only does paying it prevent the person from being able to afford necessities of life--and that doesn't "merely" mean suffering hardship, such as living in a rat-trap apartment and eating only ramen; it means not being able to afford anyplace to live or being able to feed yourself at all--and also, there are no reasonable prospects for things to get better (e.g. it's not likely that she'll get raises or promotions). My understanding is that less than 1% of the people who try to discharge studenty loans in bankruptcy are able to show sufficient hardship so as to do so.

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