Not sure where you are from. You can declare bankruptcy and restructure a normal loan or take a full on credit penalty for the next decade which severely restricts you from borrowing. It depends on your state laws and what chapter you file under . Yes they can take assets to pay the loan but in some states certain assets are restricted from being part of payback. Student loans are not normal loans and are outright predatory. You cannot declare bankruptcy if you fall upon hard times to help make it more reasonable to payback if not eliminate it.