Identification

• You will not lose your student loan money in a bankruptcy case, because loans do not count as income, even if you have leftover funds sitting in a bank account. The student loan creditor would probably also object to any another creditor that tried to take student loan funds.
  
  

Discharge

• While your student loan funds are safe from other creditors in a bankruptcy case, you cannot eliminate them either. In 2011, bankruptcy code makes a discharge of student loans nearly impossible, because the government does not want people obtaining a free education through the court system. In rare cases, such as when you become disabled, you might be able to discharge your student loan debt.
  
  

Effects

• Filing bankruptcy may or may not impact your ability to acquire future loans. In general, the government does not base decisions for federal loans on credit, so a bankruptcy does not impact federal financial aid packages, according FinAid. Private student loan lenders, however, make lending decisions based on creditworthiness, so a bankruptcy likely lowers your chances of being approved for future private student loans.
  
  

Tip

• Consult a bankruptcy attorney regarding your student loans. Lenders often transfer or sell student loans, so there might be an error on your account balance that makes it appear as if your student loans are income. In case of an error, your attorney will help you file an objection and then the judge decides on the true student loan balance.