The burden of student loan debt is felt by numerous former students these days. Whether they are in Tennessee or elsewhere in the country, many of them have wondered whether their student loans could be discharged during bankruptcy.
As is the case with many legal questions, the answer is: It depends.
While student loans are notoriously difficult to discharge in bankruptcy, it may be possible to do so in certain situations. For many courts, the standard is whether the student loans are causing the debtor "undue hardship."
Undue hardship is not a term that courts take lightly. Many courts use the Brunner test, whose name is taken from an influential case. To measure whether a person has truly shown undue hardship, the court must see that:
- The debtor cannot maintain a minimal lifestyle for himself or herself and dependents, if any.
- These circumstances are unlikely to change for a significant part of the student loans' repayment period.
- The debtor has demonstrated, through good faith efforts, attempts to repay the student loans.
If a debtor wants to attempt to discharge student loans through bankruptcy, he or she must file an additional petition. The petition is called an adversary proceeding.
The issue of student loans' ability to be discharged in bankruptcy is a contentious one for lawmakers and former students alike. Lawmakers, including a congressman from Tennessee, have been introducing bills for years, attempting make it easier to discharge student loans. Their efforts have not yielded much success - but they have not stopped trying yet.
A debtor who is considering bankruptcy and has a large amount of student loans should contact an experienced bankruptcy attorney. An attorney will be able to assess the situation and explain the process of attempting to have student loans discharged through bankruptcy.
