Student Loan Debt and Bankruptcy
What Is the Undue Hardship Exception?
You may be able to have your student loan debt discharged in bankruptcy. If you can demonstrate that paying these loans would create an undue hardship, they may be discharged in chapter 7 or chapter 13 bankruptcy. The courts do not ordinarily discharge these debts, but if you can show that your income is very low or that you went to a for-profit trade school, you have the best chances.
What Is the Brunner Test?
Many courts determine eligibility for discharge based on the Brunner test. You must meet the following criteria to pass this test:
- The effort that you made to pay your loans was in good faith.
- You are likely to remain in your current financial situation until the end of your repayment period.
- Your income isn’t high enough for you to pay your monthly bills and live above the poverty level.
Procedures for Discharging Your Student Loans:
You must complete several procedures to have your student loans discharged in bankruptcy. The best thing that you can do is hire a Brooklyn bankruptcy attorney to help you with this. You will need to go to the bankruptcy court so that the court can determine whether or not your loans may be discharged. You do this by filing an adversary proceeding. Then, you must present evidence to the court that shows that it isn’t possible for you to repay your loans. You may need to call an expert witness to testify as to whether or not you have the capacity to become gainfully employed. All this will require that you have a bankruptcy lawyer Brooklyn.
An attorney at the Ursulova Law Offices is familiar with previous rulings in this area of the law, so it is highly important that you contact us before you present yourself at the bankruptcy court. When you meet with your bankruptcy lawyers in Brooklyn NY, they will be able to tell you whether or not it is likely that your loans will be discharged. If so, they will represent you in court. Contact us today.