By William Waldner, Esq.
If you are considering Chapter 13 bankruptcy and also carrying federal student loans, there is a piece of good news that still holds in 2026: a federal regulation lets the payments you make under a confirmed Chapter 13 plan count toward student loan forgiveness — even while your loans sit in bankruptcy forbearance and you are not paying on them directly.
What the Rule Actually Says
Under 34 C.F.R. § 685.209, for a bankruptcy forbearance on or after July 1, 2024, each month you make the required payments under a confirmed Chapter 13 plan counts toward the forgiveness clock on an income-driven repayment (IDR) plan. IDR forgiveness generally arrives after 240 months, about 20 years, for undergraduate borrowers, and after 300 months, about 25 years, when graduate loans are involved. Before this change, months spent in Chapter 13 usually did not count unless you were also making separate payments — an unrealistic ask for someone already funding a court-supervised plan.
The 2026 Student-Loan Landscape Has Shifted
The repayment menu changed a great deal after this rule first took effect, so it is worth being precise about where things stand. The SAVE plan was vacated by court order in March 2026 and eliminated by the 2025 federal budget law. Income-Based Repayment (IBR) is now the surviving long-term IDR plan, keeping its 20- to 25-year forgiveness timeline. A new Repayment Assistance Plan (RAP) begins July 1, 2026 with a 30-year timeline, and older plans such as PAYE and ICR are being phased out. Because the Chapter 13 credit is tied to income-driven forgiveness, the plan you are in affects the details — so confirm your specific plan and payment count with your loan servicer and the U.S. Department of Education.
Where Chapter 13 Fits, and Where It Does Not
Chapter 13 is powerful, but the loans themselves remain hard to discharge in bankruptcy; we explain why in our post on why student loans are so hard to discharge. What Chapter 13 does well is make the rest of your debt manageable while the forgiveness clock keeps running in the background. Your plan payment is based on what you can afford, which depends in part on how New York’s median income affects your Chapter 13, and there are options if you ever need to adjust or defer a plan payment after a setback.
Steps to Take Now
Tell your bankruptcy attorney about your student loans before your plan is confirmed. Confirm with your servicer that your loans qualify for IDR forgiveness, and ask how bankruptcy-forbearance months are being credited. And keep your own records of every Chapter 13 plan payment — the months may be credited automatically, but documentation protects you if the count is ever disputed.
Ready to Put Both Problems on One Plan?
Law Office of William Waldner — 469 Seventh Avenue, 12th Floor, New York, NY 10018 Call 212-244-2882 to schedule your free, confidential 20-minute consultation. We handle bankruptcy cases exclusively, in the Southern and Eastern Districts of New York.
