Attorney
For many people, student loans are a long-term financial burden that seems impossible to escape. Even after years of repayment, high balances and interest rates can make progress feel out of reach. If you’re struggling with overwhelming student loan debt, you may wonder if bankruptcy could be a solution. While discharging student loans through bankruptcy is challenging, it’s not impossible. Understanding the process and exploring alternative options can help you make an informed decision about your financial future.
Can Student Loans Be Discharged in Bankruptcy?
Student loans are generally more difficult to discharge in bankruptcy than other types of debt, like credit cards or medical bills. Under U.S. bankruptcy law, you must prove that repaying your student loans would cause “undue hardship.” Courts typically use the Brunner Test to determine if this standard is met.
What Is the Brunner Test?
The Brunner Test comes from a 1987 court case, Brunner v. New York State Higher Education Services Corp., and is now the most common way courts evaluate student loan discharge requests. To qualify, you must satisfy all three of the following criteria:
1. Current Financial Hardship: The debtor presently lacks the ability to repay the loan.
You must show that repaying the student loans would prevent you from maintaining a minimal standard of living for yourself and your dependents. This means that after covering basic expenses like housing, food, and healthcare, you have little to no money left to make loan payments.
2. Persistence of Hardship: The debtor’s inability to pay the loan is likely to persist in the future.
Your financial difficulties must be expected to continue for a significant portion of the repayment period. This often applies to individuals facing long-term unemployment, chronic illness, or other enduring hardships.
3. Good Faith Effort to Repay: The debtor has acted in good faith in the past in attempting to repay the loan.
You need to demonstrate that you’ve made a genuine attempt to repay your loans. This could include making payments when possible, seeking income-driven repayment plans, or exploring loan forgiveness options before resorting to bankruptcy.
Meeting all three parts of the Brunner Test is challenging, but not impossible—especially with the guidance of an experienced bankruptcy attorney.
Alternatives to Bankruptcy for Student Loan Relief
If you don’t meet the Brunner Test criteria or want to explore other options before considering bankruptcy, there are several alternatives to manage your student loan debt:
- Income-Driven Repayment (IDR) Plans
- Public Service Loan Forgiveness (PSLF)
- Loan Consolidation or Refinancing
- Deferment or Forbearance
Take Control of Your Financial Future
Whether you’re considering bankruptcy or exploring other debt relief solutions, an experienced attorney can guide you every step of the way.
At Pleasant Legal Solutions, we help clients explore debt relief options tailored to their unique financial challenges. Facing student loan debt can feel isolating, but you don’t have to navigate it alone. If you’re burdened by student loan debt and unsure where to turn, we’re here to help. Contact us today to schedule a consultation and learn how you can regain control of your finances.