How to Get Rid of a Defaulted Student Loan Without Paying Anything

If you accepted U.S. federal student loans to attend an institution of higher education and failed to repay them as required, your loans are in default status. It is difficult, but not impossible, to discharge or cancel a federal student loan. Under limited circumstances, you may qualify for one of the cancellation reasons or for a discharge in a federal bankruptcy proceeding.

Instructions

Bankruptcy

1

File a petition for bankruptcy protection in the appropriate federal bankruptcy court. To request an entire discharge, you must file a chapter 7 bankruptcy. File in the state where you are domiciled at the time of the filing.

2

Include, with the bankruptcy petition, a complaint to determine dischargeability of a student loan. You must explain why repayment of the loan qualifies as an "undue hardship" for you in the complaint. Individual jurisdictions determine what qualifies as an "undue hardship".

3

Appear at the hearing scheduled on the complaint in the bankruptcy court. Most courts will set the matter for a hearing to determine whether or not to allow the student loan to be discharged. Provide the court with evidence to support your claim of undue hardship, such as income verification, monthly expenses and medical records if a medical condition contributes to your inability to pay.

Other Reasons for Cancellation

4

Select the appropriate reason for which you qualify for cancellation. This includes situations where the school closed while you were attending, false certification, identity theft, unauthorized signature and total and permanent disability. A teacher loan forgiveness program is also available.

5

Complete the form in its entirety. Ensure you read the instructions carefully. Some forms, such as the total and permanent disability form, require a confirmation signature. Additional documents supporting your claim may also be necessary.

6

Mail the form to your loan holder. If you are unsure who currently holds your loan, you may locate the information through the National Student Loan Data System, or NSLDS.