You've probably heard that student loans survive bankruptcy no matter what. That belief is old, and it isn't the whole truth anymore.
Federal and private student loans can be discharged in bankruptcy in Texas, but only if you clear an extra legal hurdle called an adversary proceeding. Courts here apply one of the toughest versions of that test in the country, so getting it right matters more than it does in most states.
Attorney Lindsay Steele's practice is focused primarily on consumer bankruptcy law. She takes care to limit the number of clients she represents at a given time, which lets her devote real time and attention to each case, so every client's specific financial situation gets the focus it needs.
Yes, but not automatically. Chapter 7 and Chapter 13 wipe out most unsecured debt without you lifting a finger beyond filing the case, but student loans need an extra step called an adversary proceeding, a separate lawsuit filed inside your bankruptcy.
Under 11 U.S.C. ยง 523(a)(8), student debt is presumed to survive bankruptcy unless you can show that repaying it would create an undue hardship for you and your dependents. That presumption can be beaten. It's rebuttable, not permanent, and that distinction gets lost in a lot of the advice floating around online. A completed case ends in a discharge order that treats the loan the same as any other debt the court wipes out.
Bankruptcy cases for Fort Worth residents get filed with the U.S. Bankruptcy Court for the Northern District of Texas, and that court follows the same Fifth Circuit rules covered next.
Texas sits inside the Fifth Circuit, which applies the undue hardship test about as strictly as any court in the country.
Judges here follow the Brunner/Gerhardt standard, and in In re Thomas (2019), the Fifth Circuit openly admitted its own reading of the law makes discharge almost impossible to win, then upheld it anyway.
That distinction changes how a Texas case gets built from day one.
Every Texas bankruptcy court, including here in Tarrant County, asks the same three questions before granting a student loan discharge, and you have to answer all three or the case fails.
Your current income and expenses can't support even a bare bones life for you and anyone who depends on you if you're forced to keep paying. Courts look at real numbers here, not projections, so pay stubs and bank statements carry more weight than a written explanation.
You need more than a rough year. Courts want evidence that your financial trouble is likely to last most of the repayment period, whether that's a permanent disability, a chronic illness, or skills that no longer match what employers are hiring for.
Judges want to see that you tried before you sued. Enrolling in an income driven plan, requesting deferments, or making partial payments when you could all support this prong, and skipping it can sink an otherwise strong case.
The Department of Justice, working with the Department of Education, rolled out new guidance on November 17, 2022 that changed how federal attorneys handle these cases, and it still applies to filings today.
This guidance only reaches loans the Department of Education holds directly. Private lenders and old FFEL loans still held by a guarantor sit outside it.
Either chapter lets you file the adversary proceeding, so the choice comes down to your other debts and your income, not the student loans themselves.
Chapter 7 clears most other unsecured debt in a few months and frees you up to focus the fight on your loans.
Chapter 13 stretches everything into a three to five year repayment plan, which can lower your student loan payments during that stretch even if the court denies full discharge at the end.
We can walk through your income and debts and tell you which chapter fits your numbers.
Federal collections on defaulted student loans went quiet for years and started moving again through 2026, and the Department of Education can now take up to 15 percent of your paycheck without ever going to court. That single fact changes the math for a lot of people who were planning to wait and see.
Filing bankruptcy triggers an automatic stay the moment your case is filed in Fort Worth or anywhere else in Texas, and that stay stops garnishment in its tracks while the court sorts out what happens to the loan itself. Waiting until a notice is already showing up in your paycheck only makes an already hard process slower.
For general background on your options as a borrower, the Consumer Financial Protection Bureau publishes plain language guidance worth a look before you file.
You'll still get whatever Chapter 7 or Chapter 13 relief applies to your other debts, and the student loan balance stays intact afterward. Courts sometimes grant a partial discharge too, wiping out interest or a slice of the principal even when full relief isn't approved. Either way, we can revisit repayment options with you once the rest of your finances are cleared out.
Only if the loan meets the federal tax definition of a qualified education loan, and most private loans do. If yours doesn't qualify, it gets treated like ordinary credit card debt and discharges right along with everything else, no adversary proceeding needed. That's worth having us check your loan paperwork before you assume the worst.
Contested cases often take six months to over a year, though the real timeline depends on the court's docket and how hard the loan servicer pushes back. Ask us for a realistic estimate based on current caseloads in your district. Stipulated cases resolved through the DOJ's attestation chapter 13 bankruptcy process tend to move faster since there's no full trial. Either way, your regular Chapter 7 or Chapter 13 case usually finishes first, with the loan question wrapping up on its own timeline.
Generally, no. The adversary proceeding is part of your bankruptcy case, not a separate event, so it typically doesn't show up as its own mark on your credit report. The bankruptcy filing itself is what affects your score. The bigger risk is doing nothing, since a defaulted loan already in collections keeps chipping away at your score every month it sits there. Filing sooner usually limits the damage instead of adding to it.
You came here wondering if student loans are really untouchable, and now you know they're not, just harder to reach than most other debt.
That's the kind of case our founding attorney Lindsay Steele built her practice around, and she keeps her caseload small on purpose so she can dig into details like yours instead of rushing you through a template process.
If wage garnishment is already eating into your paycheck, or you're just tired of feeling stuck, contact our firm today and find out what your numbers actually support.
