With academic fees in the United States soaring, it is not uncommon for people to leave their education burdened by debt that follows them for years or even decades. Filing for bankruptcy is a legitimate way to seek debt relief. However, it is important to understand the relationship between student loans and Chapter 7.
Experienced Bankruptcy Lawyers in California
For almost three decades, Christopher P. Walker has been working with the people of California across a range of legal issues to help ensure their peace of mind. He has assisted clients with estate planning, probate issues, and bankruptcy proceedings. Bringing a comprehensive and results-oriented approach to counsel, the Law Office of Christopher P. Walker has built a reputation as an effective and resourceful litigator.
Chapter 7 Bankruptcy
Sometimes called “liquidation bankruptcy,” Chapter 7 is one of the most common forms of bankruptcy in the United States, with over 300 thousand filings in 2025 alone. California Chapter 7 bankruptcy laws align with federal guidelines under 11 U.S.C. 101, which allow individuals to seek relief when mounting financial pressure and limited income leave them unable to realistically keep up with their debts under the means test.
Chapter 7 settles these debts by empowering a third party to liquidate non-essential assets of the filer. Unsecured debts, unbacked by assets, are wiped clean. Things such as medical bills, personal loans, and business debts are common examples of unsecured, dischargeable debt, addressed in Chapter 7.
Non-Dischargeable Debts
While filing is a legitimate way to seek financial relief, there are some forms of debt that are non-dischargeable. These are what are known as “priority debts,” where their continued payment is deemed to serve the public interest. They include:
- Alimony and child support. To protect the financial well-being of dependents, individuals paying for child support and alimony to former spouses retain responsibility for their payments despite a Chapter 7 filing.
- Taxes. Although older forms of income tax may qualify for discharge under Chapter 7, typically, tax debts less than three years old are non-dischargeable.
- Court penalties. Fines imposed by courts for restitution remain in place whether a Chapter 7 filing is successful or not.
Qualifying for Chapter 7 Bankruptcy
Applying for Chapter 7 entails passing what is known as the “means test.” This is a process that determines whether a filer has enough disposable income to repay their debts. Typically, a person’s income is compared to California standards for families of the same size. If a filer’s income falls below this, then they may pass the test.
If the filer makes more, then they may submit a completed Means Test Calculation Form and submit it to their local division of the United States Bankruptcy Court. For those living in Anaheim, this can be done at the Ronald Reagan Federal Building and U.S. Courthouse, located at 411 West Fourth Street in Santa Ana, CA, 92701.
Student Loan Debts and Chapter 7
The total student loan debt of Californians is over $151 billion. Achieving a discharge of student loans can be difficult when filing for Chapter 7, but it is possible. In order to do so, an “adversary proceeding” must be filed by the petitioner. This action requires the filer to show that maintaining a minimum standard of living would not be possible should they be forced to repay their loan.
Courts often apply what is known as the “Brunner Test” to determine whether a filer has legitimate cause to discharge their student loans. This requires convincing evidence to be presented that shows the filer experienced significant hardship during the loan repayment period, and that repayment efforts were made in good faith.
How Christopher P. Walker Can Help
When considering Chapter 7 filing in general—and an adversary proceeding in particular—it is important to hire a Chapter 7 bankruptcy lawyer in Orange County. Christopher P. Walker has worked with clients across a range of Chapter 7 bankruptcy cases.
As an experienced Chapter 7 bankruptcy attorney, Christopher P. Walker can assist in preparing adversary proceedings and ensure that filers are prepared for the rigors of meeting the Brunner Test, advising on what documents to prepare and how to present their case in an effective manner.
FAQs About Student Loans and Chapter 7
What Are the Non-Dischargeable Debts in Chapter 7?
Non-dischargeable debts are those that cannot be cleared by a Chapter 7 filing. Typically, debts that are deemed to serve the public interest are non-dischargeable. Likewise, student debt often falls into the category of a non-dischargeable debt. Unless a filer engages in an adversary proceeding, they will typically have to continue paying back student loans.
What Are Three Examples of a Non-Dischargeable Debt?
There are several examples of non-dischargeable debt. These include taxes, forms of alimony and child support, and court penalties that have been applied to the filer. All of these are considered forms of priority debts, which means their repayment serves the public interest and therefore must be repaid by the filer.
What Not to Do Before Filing Chapter 7?
Because Chapter 7 depends on the fact that a filer is unable to pay back loans, there are a few things they should avoid doing before filing. Transferring large amounts of money or property can look suspicious. Likewise, paying back creditors before filing can demonstrate that debt relief is unnecessary.
Can Federal Debt Be Discharged in Chapter 7?
Yes, certain federal debt can be discharged in Chapter 7 in some cases. Tax debts older than three years typically qualify for discharge. Likewise, student debts may be discharged if the filer enters into an adversary proceeding and successfully argues that to continue making repayments would cause them undue hardship.
Hire a Chapter 7 Bankruptcy Lawyer
Finding relief through Chapter 7 is not an uncommon occurrence. The number of people filing for Chapter 7 in 2025 saw a 15% increase from 2024. Whether you are filing to help relieve tax debt, medical expenses, or student loans, it is important to have experienced counsel by your side. Contact Law Office of Christopher P. Walker, P.C., today to find out how he can help you.