Loan Debt and Bankruptcy

When you are swimming in loan debt and are unsure of the best process for paying it off, a good bankruptcy lawyer you can trust will be able to answer your questions about the bankruptcy process and help you as you begin filing. If one of the debts you have is student loans, you are likely wondering how bankruptcy will affect your loans and what can be done when you owe a lot of money on them. Typically, if you have student loans, this is not something that you would be able to use bankruptcy to help get rid of. Like other types of special debts (such as child support), you will still need to keep up with these payments. That said, a good bankruptcy attorney knows that there may be an exception.

Is there any way to use bankruptcy to your advantage when it comes to student loans? 

Yes, it is possible. In some circumstances, you may be able to discharge your student loans through bankruptcy if you are able to show undue hardship. Depending on the specific court that you go to, you may be able to get some or all of your student loan debts discharged. Some courts are more strict and require an “all or nothing” type of approach. 

What is the Brunner Test? 

If you have heard of the Brunner test then you know that this is one of the ways you may be able to discharge your student loans. However, it is imperative that you meet the three factors listed in the Brunner test in order to qualify. 

1. You have no money. Because of the expenses you have and how much money you make, you are not able to maintain a standard of living that is sufficient and thus cannot repay your student loans. 
2. Your situation won’t change. The current financial situation you are in is not likely to change during a large portion of your repayment period. 
3. You have tried to make payments. Even during your time of hardship, you have tried to make payments on your student loans. 

Although it can be difficult to discharge some or all of your student loans, it is still possible. When you work with a lawyer, like a Chapter 7 bankruptcy lawyer in Garland, TX from Allmand Law, he or she will listen to your situation and determine what the next best steps are. For more information on discharging student loans during the bankruptcy process, reach out to a trusted attorney today.