Huffpost Business

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Steve Rhode Headshot

I'm Disabled With 20 Year Old Law School Debt I Struggle to Pay

Posted: Updated:

Huffington Post Reader Question

Dear Steve,

I have amassed a huge student loan debt from law school over 20 years ago. I never completed law school because of mental health issues.

My loans went into default and I have not been in an economic position to make regular payments all of these years. The student loan company (American Student Assistance) takes money from my SS Disability and the IRS gives them my tax return every year.

I filed bankruptcy several years ago but was unable to discharge the school loans.

How do I go about trying to get relief from these loans without having to pay an attorney?


Don't miss my free my weekday email newsletter with the latest tips and advice on how to beat debt and do better financially. Subscribe now. - Click Here

Dear Tony,

The ability for bankruptcy lawyers to deal with student loans in bankruptcy is still a very new issue. Most people, and bankruptcy attorneys incorrectly assume there is no hope for addressing student loan debt in bankruptcy. That is simply not true.

Your case sounds very similar to that of Mike Hedlund, who also went to law school but never became an attorney. Mike was able to get a substantial partial discharge of his student loan debt in bankruptcy. You can read all about his case here.

It sounds as if these are federal student loans if they are garnishing your tax refund. There are several good options for dealing with this debt.

First, if you get a refund each year then adjust your withholdings so you breakeven at the end of the year. That way there is nothing to take from the IRS.

Second, it sounds as if Social Security has issued you a disability determination and you may be eligible for a disability discharge of your federal student loan debt. You can learn more about that option in the free guide The Ultimate Guide to Dealing With Student Loans You Can't Afford.

Finally, even if you struck out on the two options above it sounds as if you would be eligible to participate in a federal income based repayment plan and in that case your payment could be as low as $0 per month. The guide above has links and more information on this option.

Get Out of Debt Guy - Twitter, G+, Facebook

If you have a credit or debt question you'd like to ask, just click here and ask away.

If you'd like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.