Most educational student loan debt is not automatically wiped out in bankruptcy, and in many cases remains after you file unless you meet a very strict hardship test.

Key loan debts not wiped out

When people ask “what kind of loan debt is not alleviated when you file for bankruptcy?”, they’re usually bumping into the rules on nondischargeable debts.

  • Student loans (federal and most private) generally survive bankruptcy unless you file a separate lawsuit in the case and prove “undue hardship,” which is a high bar in many courts.
  • Loans from retirement plans (like 401(k) or 403(b) plan loans) also are not dischargeable; if you stop paying, the IRS usually treats it as a taxable early withdrawal with possible penalties.

So if you are thinking of bankruptcy mainly to get rid of student loans or retirement-plan loans , it is important to know that those specific loan debts often will still be there when the case is over.

Information gathered from public forums or data available on the internet and portrayed here.