How to Contest a Student Loan Discharge Denial

You will find it is not easy to get a student loan discharged. The process involves filing for bankruptcy and proving that paying the loan would place you under undue hardship. The bankruptcy judge will determine if your loan should be discharged, but no decision is completely final. 

Set Up a Payment Plan

The lender has the power to discharge a loan even if the judge decides not to do so. Lenders have no real incentive to discharge, though, because they would like to be paid on the loan. Keeping this in mind, you would do best to create an incentive. Consider offering a partial payment plan whereby you repay a portion of the loan you can afford. With this method, the lender makes money, but you are saved from owing the entire loan balance.

Offer Assets

If the payment plan is refused, consider offering a piece of property as final settlement on the loan. This will typically work only if the lender additionally works with other loan types, such as home loans or car loans. Offer your collateral as full payment on the debt, and the lender may be able to accept the collateral and then sell it for a profit, accepting your terms.


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