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At Natural State Law, PLLC, we like to stay on top of national developments in bankruptcy law, even when the ruling happens outside our jurisdiction.

For example, the Tenth Circuit Court of Appeals (which oversees Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming) ruled that a Colorado couple’s $200,000 in private student loans (owned by loan giant Navient) were discharged in their Chapter 13 case.

What This Means for Broader Student Loan-Related Bankruptcy

Generally, student loan debt is not dischargeable in any type of bankruptcy case without a showing of undue hardship—an extremely difficult burden. This case and a few others have brought the important issue of American student loan debt to the forefront. For many couples like this, who can stay current on all their other bills, the large monthly payments due on their student loans mean that they have no opportunity to save for emergencies, retirement, or even for a family vacation.

This decision could begin to change the opinion about what type of student loan debt is dischargeable through bankruptcy. For those considering bankruptcy due to massive student loan balances, they now may have an option to wipe those debts clean and start over or set up a more realistic payment plan with their creditor.

Why Student Loan Debt Matters

Student loan debt is a hot button issue across the country with borrowers across the age spectrum owing a total of more than $1 billion.

That number alone shows why many student loan borrowers may have to consider bankruptcy. The typical student loan borrower is young and borrows a substantial sum of money. The borrower has no guarantee that the income he or she will make upon entering the workforce will be enough to service the debt in addition to meeting his or her living expenses.

This new ruling may offer some renewed hope for those looking for options to get themselves out from under overwhelming student loan debts.


If you have a significant student loan balance and cannot see a realistic path to paying it back, it might be time to discuss your options with a qualified Arkansas bankruptcy attorney. Our team is standing by to listen to your specific situation and help decide if Chapter 7 or 13 bankruptcy is right for you. Call us today at (501) 916-2878 to learn more.