Student Loans and Bankruptcy



In a country where citizens are over 1.5 trillion dollars in student debt one of the more common questions that Bankruptcy attorneys receive is “Can my student loan be discharged by a Bankruptcy?”

It is commonly believed that filing for Bankruptcy cannot discharge your student loan debts. Although it is very difficult to get your student loans discharged through Bankruptcy it can in fact happen. You will need to show that repaying this debt imposes an undue hardship on you and your dependents if you have any. Most Courts have established a test to determine whether or not a Bankruptcy Petitioner has shown an undue hardship the test was created in Brunner v. New York State Higher Educ. Servs.. Known as the Brunner Test Courts use the following factors to determine an undue hardship; 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987).



Other Courts us a different test that takes into account a totality of the circumstances surrounding the petitioners request. This totality test uses similar factors, but this test is less difficult to prove a burden. Even with these two tests most Courts will be very unlikely to discharge student debts.

An experienced Bankruptcy Attorney will likely be able to help you successfully discharge your student loan Debt because they know what will qualify as an undue hardship in your respective area. Once you have had a meeting with a qualified Attorney they will be better suited to understand your situation, and to file the Adversary proceeding to attempt to discharge your Student Loan debt.


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