How To Have Student Loans Wiped Out Due to Mental Illness

By Anna Green

Student loans are only dischargable under personal bankruptcy law if the debtor can show that she will be caused substantial hardship if forced to pay them back. For persons with mental illnesses that impact their ability to maintain stable employment, the court may wipe out their student loans during a bankruptcy proceeding if the debtor is able to show written proof of her illness and its impact on her financial situation.

File for Chapter 7 or Chapter 13 bankruptcy. In most circumstances, student loan providers will not consider wiping out a loan due to financial hardship until the debtor has filed a bankruptcy petition with the court.

Show that your student loans are causing you undue hardship. In order to have your student loans wiped out due to mental illness, you will need to show the loan provider that you cannot make regular monthly payments on your loans and still maintain a minimal standard of living.

Get written documentation of your formal diagnosis. In order to have your loans wiped out, you will need to provide written documentation from your doctor that lists the name of your mental illness and the nature of the problems that it causes.

Prove that your ability to earn wages is significantly impaired by your mental illness. If you are unable to work because of your mental illness, you will need to provide documentation to this effect. In addition to a letter from your psychiatrist, you may be asked to show proof of disability or documentation from the U.S. Social Security Administration.

Establish that your mental illness is not likely to improve over the course of your loan's term. The court or loan provider will not wipe out your student loan if there is a chance that you may recover from your mental illness and regain your earning potential.

About the Author

Anna Green has been published in the "Journal of Counselor Education and Supervision" and has been featured regularly in "Counseling News and Notes," Keys Weekly newspapers, "Travel Host Magazine" and "Travel South." After earning degrees in political science and English, she attended law school, then earned her master's of science in mental health counseling. She is the founder of a nonprofit mental health group and personal coaching service.

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