Many people that file bankruptcy believe that student loans can’t be discharged or even included in their filings. The truth is that while less than 1 percent of filers include their student loan debt in their bankruptcy petition, roughly 40 percent that do, get their debt discharged. While doing so may be an uphill battle, most filers have already gone months, if not years struggling with debt so, honestly, what are a few more months?
Working with an attorney can help you include your student loan debt in your bankruptcy petition and may even help you exhibit the three necessary elements of hardship needed to get them discharged. This proof of hardship is known as the Brunner test and is designed to show the bankruptcy trustee and court that you should be relieved of your student debt because not doing so would cause you undue hardship.
It may sound complex, but the Brunner test is quite simply, three questions regarding your personal financial situation. The first of the three Brunner test statements is pretty simple. It is actually what drives most people to file bankruptcy in the first place: you cannot, with your income, maintain your living standard for yourself or your dependents. If you’re filing bankruptcy even without including student debt, this statement should be true.
The second Brunner test statement is designed to prove that your situation is not likely to change anytime soon, meaning that there are circumstances that will affect your ability to pay your student loans for much of the repayment period. Lastly, you have made an attempt to repay the loans prior to filing bankruptcy. How do you know you can’t repay them if you haven’t tried?
Even if the above Brunner test questions seem difficult to prove, working with an attorney may help you. With their skill and knowledge of the law, you may be able to discharge your student debt and move forward with a debt free life.