Introduction — Why this matters now for California borrowers
Student loan debt remains one of the most common and stressful obligations for many Californians considering bankruptcy. Filing a bankruptcy petition raises two separate (but related) questions: (1) must you list your student loan on the petition and schedules, and (2) should you actively pursue a separate adversary proceeding to try to have that loan discharged as an "undue hardship"?
Short answers: you must list all creditors (including student loans) on your petition and creditor lists, but whether — and when — to pursue a student loan discharge depends on legal standards, your current and projected finances, and recent federal guidance that affects how the government evaluates discharge requests. The procedural requirement to supply creditor names and addresses is mandatory at the time of filing.
At the same time, federal law still makes student loans nondischargeable except for "undue hardship," codified at 11 U.S.C. § 523(a)(8). That statute remains the starting point for any discharge strategy.
Legal framework and the new DOJ/ED process
Statute and procedure: 11 U.S.C. § 523(a)(8) makes educational loans nondischargeable unless excepting them from discharge would impose an "undue hardship" on the debtor and dependents. Courts interpret "undue hardship" (the Ninth Circuit applies the Brunner/three‑prong approach) and require a separate adversary proceeding within the bankruptcy case to decide dischargeability.
The mechanics of a discharge request have changed in important ways since late 2022–2025. The Department of Justice (which represents the Department of Education in bankruptcy adversary proceedings) and the Department of Education published joint guidance and a borrower "attestation" process intended to make evaluation of undue‑hardship requests more consistent and, in many cases, more favorable to borrowers. Under that process a debtor (or debtor's counsel) completes an attestation form and the AUSA/ED review the facts and may recommend a stipulation for discharge to the bankruptcy court. That change materially affects the likelihood and timing of seeking a discharge.
Strategic considerations for California debtors — when to include and when to pursue discharge
1) Always list the loans on your creditor list and schedules. Federal rules require a debtor to file a list of names and addresses for entities that will appear on the official schedules; omitting a known creditor can create notice and claims problems later. Listing the loan on your petition does not automatically mean it will be discharged — it simply gives the court and creditors proper notice.
2) Consider your goal: cash-flow relief vs. debt elimination. If your main aim is an immediate fresh start for nondischargeable debts (e.g., Chapter 7 discharge of other unsecured debt), you still must list student loans. But if your objective is to eliminate the loans themselves, you must (a) be prepared to file an adversary proceeding, and (b) be ready to document present and likely future inability to repay plus good‑faith efforts — the core undue‑hardship inquiry under Brunner and Ninth Circuit precedent.
3) Use the DOJ/ED attestation strategically. Because DOJ/ED now use an attestation and internal review process, debtors who have a plausible undue‑hardship claim should generally prepare the attestation early and coordinate with counsel about submitting it to the AUSA handling the case. In many districts AUSAs will accept the attestation early in the adversary proceeding to allow prompt consideration of a stipulation. This can shorten litigation and increase the chance of a favorable outcome.
4) Chapter choice and timing matters. In Chapter 7, an adversary proceeding to discharge student loans can be filed after the petition; in Chapter 13 a debtor may include student loan repayment obligations in the plan but still needs a separate adversary proceeding to have them discharged permanently. Chapter 13's longer plan period can be useful if the debtor's income is likely to rise (which weakens an undue‑hardship claim) or if negotiating plan treatment of loans is preferable to immediate litigation.
5) Factor in the enforcement environment. Federal collections and garnishment activity resumed in 2025 after pandemic-era pauses — a practical consideration when timing a bankruptcy filing and a discharge effort because collection pressure (and the threat of garnishment) may push a debtor toward faster relief or loan rehabilitation options. Talk to counsel about immediate protective steps (temporary injunction requests are rare; instead, debtors often pursue loan rehabilitation, consolidation, or prompt adversary filing).
6) Watch pending legislation. Congress reintroduced the Private Student Loan Bankruptcy Fairness Act (H.R.423) in January 2025, which, if enacted, would change the dischargeability of many private student loans. Its status (currently introduced and referred to House Judiciary committee) may influence whether private‑loan borrowers rush to litigate now or wait for a legislative remedy. Check the bill’s progress and discuss with your attorney whether to proceed now or delay in hopes of legislative change.
Practical checklist & next steps for Los Angeles / California filers
- List every loan and servicer: Put federal and private student loans on your creditor list and schedules when you file. This preserves notice and prevents later claim objections.
- Gather documentation: Income tax returns, pay stubs, IDR payment history, collection/forgiveness correspondence, disability documentation (if relevant), medical records, and proof of reasonable living expenses.
- Talk to a bankruptcy attorney experienced with student‑loan adversary proceedings: Local counsel can evaluate likely success under Ninth Circuit precedent (Brunner) and the DOJ/ED attestation process, and will coordinate submission of the attestation if appropriate.
- Decide on timing: If you face imminent garnishment or offset, prioritize immediate options (rehabilitation or filing). If your financial picture could improve quickly, discuss Chapter 13 plan timing.
- Monitor policy and legislative changes: The federal policy landscape (DOJ/ED guidance, IDR program adjustments, and H.R.423) remains fluid — check authoritative sources or ask counsel about updates before taking action.
Conclusion — Practical bottom line: Always list student loans on your bankruptcy petition, but only pursue a discharge when the facts, documentation, and strategy align. The DOJ/ED attestation process has made discharge more workable for many legitimate hardship cases, but the statutory standard remains central. California debtors should consult an attorney to weigh timing, local court practice, and the evolving federal policy and legislative environment.