Student loans are generally non-dischargeable in bankruptcy.  The single exception is when the debtor who owes the student loan is under extreme hardship normally due to a physical problem.  There are certain minimal exceptions to the discharge ability of student loans in certain courts.  Some courts have held that the student loans can be reduced based upon the income of the debtor.

Student loans are extremely difficult to deal with in Chapter 13 because Chapter 13 requires that the student loan be paid on par with all the unsecured creditors.  At the same time, the student loan is not dischargeable in Chapter 13.  The result is that the debtor could spend five years paying his creditors only to find that the student loan was larger than it was when he started because the interest had been running during those past five years.  There are ways around this in some courts but a Chapter 13 bankruptcy will not discharge a student loan.

Charles Chesnutt

Credit card debt is, of course, the most pervasive debt in the United States.  Credit card companies provide for absolutely horrendous interest rates that they can raise and lower at their will.

A bankruptcy can stop all calls, stop all lawsuits and erase credit card debt.  This is the only way to get rid of credit card debt unless the credit card company is going to settle and take a payment for less than what is actually owed.

Dallas, 2009

A home equity loan is a device that enables homeowners to borrow money (take money out of) their homestead.  This is normally extremely inadvisable because it is removing exempt assets from a safe haven.  As long as the money remains in the homestead, it cannot be taken in Texas.  This means that a creditor who obtains a judgment against a homestead cannot force the sale of the homestead or reduce its value in any way – and the owner can sell the homestead and keep all of the proceeds after the mortgage and taxes have been paid. In Texas, a creditor cannot obtain a judgment lien against a homestead.

Therefore, it is normally unwise to take money out of an exempt homestead and pay it to credit cards.  This is especially true if the credit cards cannot be paid off by the loan.  The debtor should make a decision early on that at one point he will stop paying creditors with exempt money.

Charles Chesnutt