When someone decides to file bankruptcy, they often wonder what kind of debts are dischargeable. One of the debts brought up most are student loans. While these are extremely difficult to discharge during bankruptcy, it is not impossible. Courts may consider allowing the student loans to be discharged if it can be demonstrated that paying them would cause an undue hardship.
In order to determine whether a debtor meets the criteria for “undue hardship,” the court may use The Brunner Test. Based on the results of this test, a debtor may be eligible for a discharge if they meet the following three factors: poverty, persistence, and good faith.
These three factors mean:
- The individual would not be able to maintain a minimal standard of living if forced to repay the loans.
- The financial situation limiting the ability to pay will likely continue for most of or all of the repayment period.
- The individual made a good faith effort to repay the student loans.
A number of bankruptcy courts are hesitant to discharge student loans regardless of the results applied by The Brunner Test, but it is not impossible. In cases where a judge does not consider The Brunner Test, they may offer alternative options to help you make it easier for the debtor to repay his or her student loans.
In any case, having a skilled Southern California bankruptcy attorney on your side can go a long way in seeking the financial relief you need. At Wadhwani & Shanfeld, we have successfully filed more than 10,000 bankruptcy cases over our four decades of experience. We are prepared to review your eligibility for a discharge and create a compelling argument as to why your student loans should be discharged.
We understand how difficult it can be to live paycheck to paycheck, always wondering if you are going to be able to pay your bills each month. You shouldn’t have to be held back by financial hardships. We want to help you reach financial freedom instead. When you speak with our firm during a free consultation, we will help you understand which of your debts are dischargeable, determine the best type of bankruptcy for you, and explain your rights every step of the way.
To discover more about The Brunner Test or for legal help during your bankruptcy matter, we encourage you to contact our team today and learn how we can guide your case.