Lexria Review: Student Loan Bankruptcy Help

The bottom line: Lexria can connect you with an attorney who has previously helped student loan borrowers dismiss their debt via bankruptcy. It is best for borrowers with private student loans who’ve already completed a bankruptcy filing — ideally, within the past five years — but did not include that debt.


Product	Student loan bankruptcy help
Fees	$299 upon signing with an attorney. $299 monthly payments during litigation.
Total costs	12% of any amount eliminated by bankruptcy; if no debt is discharged, you pay nothing and fees are refunded.
Location	Currently available only in certain states. Contact Reset Button for details.

Pros & Cons

Pros

Money you pay is returned if your student debt is not reduced or discharged.
Monthly payment plans for legal fees are available.

Cons

Lawyers may not be available in your area.
Monthly payments of $299 are due during litigation.

Full Review

Lexria launched its services in February 2020, originally under the name Reset Button. Lexria is not a law firm, nor does it offer legal advice. Rather, it is a technology company that connects student loan borrowers with experienced bankruptcy attorneys.

While it’s possible to dismiss student loans via bankruptcy, few borrowers take this step. One of Lexria’s co-founders, Jason Iuliano, an assistant professor of law at Villanova University, found that just 0.1% of borrowers attempted to discharge student loans when filing for bankruptcy.

That low number is partly because obtaining relief presents multiple hurdles, including:

Finding a bankruptcy attorney who understands the student loan landscape.
Paying additional bankruptcy costs, for a lawsuit known as an adversary hearing.
Overcoming the lack of a set standard for dismissing loans via bankruptcy.

Lexria aims to address these challenges: It connects you with bankruptcy attorneys who’ve had success obtaining student loan relief, and it has a “Fresh Start Guarantee” that refunds your money if no debt is discharged.

Lexria can’t do anything about murky bankruptcy standards — nor the fact that student loan companies aggressively fight these lawsuits. Its Fresh Start Guarantee refunds anything you pay out of pocket if your filing is unsuccessful, but you’ll still need to pay the $299 each month during litigation.

Ultimately, talking to a lawyer in Lexria’s network costs only your time; you don’t pay anything until you sign with an attorney. But even if you both think your student loans should be dismissed via bankruptcy, you still might not end up with the relief you want or need.

Lexria details

Lexria makes its money by charging attorneys fees for nonlegal administrative services related to their cases. You do not pay Lexria; you pay the attorney you work with after signing with him or her.

Fees: $299 initial payment, then $299 each additional month during litigation.
Total costs: You’ll owe 12% of any discharge amount; your previously paid fees are credited toward this amount. If you receive no relief, you pay nothing and fees are refunded.
Payment plans: If you can’t afford the total charges post-litigation, interest-free plans of $299 a month are available.

For example, say your case lasts nine months and results in the dismissal of $80,000 in student debt. You would owe $9,600 (12% of $80,000) minus the nine $299 payments already made.

That could end up similar to how much a non-Lexria bankruptcy attorney may charge — the site uses $10,000 as a benchmark — but you'd potentially have to pay it all upfront and get no guarantee of relief.

Keep in mind that Lexria's charges are on top of the original costs from when you filed for bankruptcy, which can range from hundreds to thousands of dollars.

Lexria currently focuses on borrowers who previously filed for bankruptcy without including their private student loans, but may be able to help post-bankruptcy borrowers with federal loans as well.

Ideally, you’ll have filed within the preceding five years and be in a similar place financially, which could reinforce that you may never be able to repay the debt. There is no strict time limit, though.

In addition to bankruptcy history, you may be a good candidate for Lexria if you have:

Significant student debt.
A debt-to-income ratio that exceeds 150%.
Long-term struggles repaying student loans.

Lexria does not disclose the number of attorneys within its network.

Iuliano says attorneys are available in about a dozen states, but that number is expanding. Lexria will connect you with an individual attorney in your area, if available.

Attorneys do not pay Lexria to be listed in its network, nor to be provided with leads. Lexria rigorously vets every lawyer; Iuliano says the service has turned down 70% to 80% of interested attorneys. Those accepted all have a history of obtaining student loan relief.

Before deciding to sign with any bankruptcy attorney, be sure to ask your own questions about their experience — and success — discharging student loans.

Bankruptcy is not an option for every student loan borrower. Lexria also provides resources around income-driven repayment plans, debt consolidation and student loan refinancing.

Options besides bankruptcy

Lexria is not a law firm and cannot advise you whether to file for bankruptcy in the first place. Bankruptcy may make sense if:

Your consumer debt — like from credit cards or medical bills — is more than half your income.
It would take at least five years to pay off that debt.

If you’re facing repayment challenges, you can get student loan help from strategies besides bankruptcy.

For federal student loans. Income-driven repayment plans set your monthly bills at a percentage of your discretionary income, and multiple student loan forgiveness and discharge programs are available. These are free services.
For private student loans. Settling a private student loan for less than you owe may also be possible without filing for bankruptcy. This is primarily an option if your loan is in default and the lender doesn’t have strong options to otherwise recover it.

Reach out to your student loan servicer to see what options might be available to you.