Bankruptcy doesn’t always exclude student loan debt, but under certain conditions, it may be available as dischargeable to Chapter 13 filers in California and elsewhere. There seems to be an increased sentiment among many in the judiciary to make relief from often crippling student loan debt more available to a broader spectrum of the general public than the current laws permit.

According to personal finance experts, student debt has surpassed credit card debt as the second leading consumer debt category, behind only mortgage debt. It is not clear why student debt has been almost uniquely singled out as exempt from Chapter 13 bankruptcy, but beginning in 1976, it has been under congressional scrutiny. Before then, it was dischargeable, and the ability to discharge it has become progressively less available to the vast majority of debtors.

Currently, a narrow means test allows some with financial hardship to discharge bankruptcy. However, this is available only if extenuating circumstances exist and will likely continue to exist and a good faith effort was made to repay the debt. As bankruptcy is primarily a matter of federal jurisdiction, this test is available only for those who reside in 11 of the 13 federal circuit courts.

Chapter 13 bankruptcy filing requirements and procedures can be complicated. As there is a prohibition on amending a filing or refiling within a specified number of years, it is imperative that the filing is proper, legally correct and as advantageous as possible to the individual debtor. A bankruptcy lawyer may provide legal advice and counsel in this stressful period.