Bankruptcy and Student Loan Debt in Texas: What You Need to Know

Can You Discharge Student Loan Debt Through Bankruptcy in Texas?

Short answer: It’s possible, but not easy. While most types of unsecured debt can be wiped clean through Chapter 7 or restructured under Chapter 13 bankruptcy, student loan debt is notoriously harder to discharge.

To qualify, Texans must prove “undue hardship” under the Brunner Test, a legal standard that requires showing:

• You can’t maintain a minimal standard of living if forced to repay

• Your situation is likely to persist

• You’ve made good faith efforts to repay the loan

Need help navigating this complex standard? The legal team at Kisch Consumer Law offers tailored guidance for educational debt relief in Texas

How Do Texas Bankruptcy Laws Apply to Student Loans?

In Texas, federal laws primarily govern student loan discharges, but local court practices can influence outcomes. Here’s what Texas borrowers need to know:

• Chapter 7 bankruptcy allows for liquidation of assets but usually doesn’t discharge student loans unless you file a separate adversary proceeding

• Chapter 13 bankruptcy can restructure your debt over 3–5 years, offering temporary relief even if the loans aren’t wiped clean

Quick Tip:

If your financial hardship is tied to medical conditions, job loss, or rising cost of living in Texas, these may support your case for undue hardship under the Brunner Test

What’s the Best Way to Target Student Loan Relief in Texas?

Here’s a step-by-step strategy that could work for many:

1. Assess your loan type – Are they federal or private?

2. Check eligibility for federal programs like Income-Driven Repayment (IDR) or Public Service Loan Forgiveness (PSLF)

3. Talk to a Texas-based bankruptcy attorney—preferably one familiar with student loan cases

4. File bankruptcy and initiate an adversary proceeding if seeking discharge

5. Keep documentation of financial hardship, past payments, and correspondence with loan servicers

Use this free Student Loan Simulator from Federal Student Aid to see what options fit your income and goals

Why Choose Kisch Consumer Law for Student Loan Bankruptcy in Texas?

You don’t need just any law firm—you need one with experience in both bankruptcy and consumer protection laws. Here’s how Kisch Consumer Law stands out:

• Texas-specific expertise in consumer debt, including federal student loan protections

• Transparent, supportive counsel through every step—from hardship evaluations to filing

• A focus on data-driven strategies that align with your long-term financial recovery

Need help deciding if bankruptcy is the right move for your student loan debt? Schedule a consultation with Kisch Consumer Law to explore your options for educational debt relief in Texas

What Federal Student Loan Protections Should Texans Know About?

Federal protections could save you from needing bankruptcy altogether. Be aware of:

• Income-Driven Repayment (IDR) Plans: Set payments based on income and forgive the remaining balance after 20–25 years

• Temporary Interest-Free Forbearance (COVID-related): Some borrowers still qualify for limited relief

• Public Service Loan Forgiveness (PSLF): For those working in government or nonprofits in Texas

• Fresh Start Initiative: Re-engages defaulted borrowers in good standing

Pro Tip: These protections are harder to access with private loans. If you have private debt, legal options like bankruptcy may be more relevant

FAQs About Student Loan Bankruptcy in Texas

Can student loans be included in Chapter 7 or Chapter 13 bankruptcy?

Yes, but with limitations. You must file a separate legal action called an adversary proceeding to prove undue hardship

What is the Brunner Test?

A legal test that determines if repaying your student loans would create extreme financial difficulty. It’s the standard used in most bankruptcy courts, including Texas

Are private student loans easier to discharge?

In some cases, yes. Courts may consider private loans under different standards than federal loans

How does Texas law differ from other states?

While the underlying laws are federal, Texas courts have their own interpretations and precedents, making local legal guidance essential

How Does Filing for Bankruptcy Impact My Credit and Future Loans?

While bankruptcy impacts your credit score, strategically using bankruptcy to manage unpayable student debt can improve long-term financial health. In many cases, defaulted loans, missed payments, and compounding interest are already dragging your score down

By resolving these through structured legal action, you create a fresh foundation for:

• Building credit again

• Qualifying for housing

• Reducing overall debt stress

Ready to Take the First Step Toward Educational Debt Relief?

Let’s be real: trying to escape student loan debt in Texas feels like trying to outrun a tumbleweed in a windstorm—possible, but you’ll need a solid plan and maybe a legal lasso

Whether you’re facing aggressive collectors, juggling multiple jobs, or just trying to keep your financial future from blowing away, you’re not alone

Learn more about creating a data-driven strategy for managing your student loans with Kisch Consumer Law. The right legal advice could make the difference between financial freedom and years of avoidable stress

Bankruptcy isn’t the end. With the right tools and team, it’s your fresh start. Now saddle up, and let’s chase down that debt.