If you are struggling with student loan debt and considering filing for bankruptcy, it may provide you with a fresh start and a chance to regain control of your finances. It’s important to understand, however, that discharging a student loan via bankruptcy is extremely rare and almost non-existent, and is only granted in cases of “extreme” and “undue” hardship.
Most courts measure “undue” hardship using the Brunner Test, which includes each of the following criteria:
- You would not maintain a minimum standard of living while repaying your loan;
- You would experience financial hardship “for a significant portion of the repayment period” if you were repaying the loan;
- You made “good faith” efforts to repay the loan before filing for bankruptcy.
While Chapter 7 bankruptcy is unlikely to discharge your student loan debt, it may still be the right decision for some clients to start on a new path to financial freedom. If you’re struggling with student debt and considering filing for Chapter 7 bankruptcy, contact an experienced attorney today for a free consultation.