I have been hearing advertisements on the radio for a local bankruptcy attorney who claims to have the secret to discharging student loan debt. He implies that his firm can get your student loan debt discharged and fails to fully explain the situation. Undoubtedly, when a potential client goes to his office about their student loan debt they will be let down by the facts and the process.
Student loan debt is in fact dischargeable through bankruptcy. It can be done. The problem is that the standard that must be met in order to have student loan debt discharged in bankruptcy is very high. It is generally referred to as the "Undue Hardship Exception" and was created by Brunner vs The New York State Higher Education Services Board.
The Brunner case established 3 key factors for determining whether or not you can get a discharge of your student loan debt. 1) Based on your current situation you cannot maintain a minimal standard of living if you have to repay your student loans, 2) your situation is likely to continue, and 3) You have made a good faith effort to repay your student loans.
The type of case that is most likely to have a discharge of student loans granted would be one where the borrower took out the loans and made payments for a number of years. Then for whatever reason, became unable to work and unable to repay the student loans.
In order to have student loan debt discharged a debtor must bring an action called a "Complaint to Determine Dischargability" to the Court. Most bankruptcy attorneys will charge additional fees to bring this action. It is basically a lawsuit inside of your bankruptcy. The Court will then review the relevant facts and determine whether or not the debtor can get a discharge of their student loan debt.
If you have questions about the process or whether or not your case may qualify for a discharge please give me a call at 817-494-3344.
Matthew F. Wegner