Contact your lender to ask for plans for rehabilitation. If you have a Direct, FFEL or Perkins loan from the Department of Education, rehabilitation plans are available. Private lenders may have separate rules.
Agree to a payment plan. You will need to make regular, on-time payments toward the debt for an extended period of time. For example, for federal student loans you will be required to make at least nine payments within 20 days of their due date in 10 months.
Begin repayment of your debt. Track all payments you submit to ensure the lender has received the payment on time.
Complete your payment schedule. If you make all payments required in the rehabilitation agreement on time, you will successfully remove the default status of your loan.
Check your credit to guaranty the default was removed. If your credit score does not reflect the change of status of your loan, contact your lender immediately to ensure the problem is corrected.
Determine whether you qualify for Chapter 7 bankruptcy. Chapter 7 is a complete liquidation of your assets. If you only qualify for Chapter 13, you will face payment schedules instead of loan discharges.
Provide the judge with proof that you attempted to pay the debt. Typically, you will need to show you made payments until an emergency occurred, such as a job loss or medical problem.
Provide proof you will suffer undue hardship if you are required to repay the debt. For example, show repayment of the debt would result in missed mortgage payments or inability to pay medical bills.
Ask for a student loan discharge. Judges very rarely grant a complete discharge, so the circumstances of your misfortune must be exceptional.
Confirm the discharge status on your credit report. A loan discharge will not completely remove negative information from your credit. However, it is favorable to a loan default in the eyes of future creditors.