If you can successfully prove undue hardship, your student loan will be completely canceled. Filing for bankruptcy also automatically protects you from collection actions on all of your debts, at least until the bankruptcy case is resolved or until the creditor gets permission from the court to start collecting again.

What circumstances does a person need to prove to have their student loans discharged through bankruptcy?

What circumstances do I need to prove to have my loan discharged in bankruptcy? You must declare Chapter 7 or Chapter 13 bankruptcy and demonstrate that repayment would impose undue hardship on you and your dependents. This must be decided in an adversary proceeding in bankruptcy court.

Why is student loan debt not dischargeable?

For cases filed on and after October 17, 2005, and under current law, both federal and private student loans are not dischargeable in bankruptcy unless you can show that your loan payment imposes an “undue hardship” on you, your family, and your dependents.

Will Chapter 7 wipe out student loans?

Most debtors won’t be able to discharge (wipe out) student loan debt in Chapter 7 or Chapter 13 bankruptcy. However, if you can prove that repaying your student loans would cause an undue hardship to you, you can get rid of your student loans in bankruptcy.

Can a student loan be discharged in bankruptcy?

It doesn’t matter if your loans are with the government or a private lender; you still must show undue hardship to have them discharged in bankruptcy. The bankruptcy code itself does not specifically define “undue hardship,” for purposes of discharging student loans in bankruptcy, and courts vary by jurisdiction in the standards they use.

Do you have to show undue hardship to get student loans discharged?

You will have to present evidence of undue hardship, which you may do my producing supporting documents and records and calling experts. It doesn’t matter if your loans are with the government or a private lender; you still must show undue hardship to have them discharged in bankruptcy.

How can I get my student loans discharged?

If you want to get your student loans discharged, you will need to file a lawsuit against your student loan holder in an adversary proceeding as part of the bankruptcy process and show that paying your student loans would expose you to undue hardship.

What is the Brunner Test for student loans?

The Brunner Test. One of the most common ways of determining undue hardship for purposes of discharging student loans in bankruptcy is what is known as the Brunner Test. You must meet three criteria to qualify for undue hardship under the Brunner Test.