One of the most frustrating aspects of pursuing higher education is the cost: the price of undergraduate and graduate degrees continues to rise, and more and more students have no choice but to take on student loan debt in order to achieve their goals. Though student loans may enable educational opportunity, it also saddles graduates with debt that can seem insurmountable: the average student that graduated in 2016 carried over $37,000 in debt, and even former President Barack Obama and First Lady Michelle Obama had over $180,000 in educational debt until his first book was published.

If you are struggling under the weight of debt, you may be wondering whether you can get a fresh start by filing for bankruptcy. If you have debt that goes beyond your student loans, you may be able to discharge those, but the law precludes you from including student loan debts unless they represent a specific level of hardship that requires extensive documentation and an expectation of ongoing challenges.

For debtors to be able to discharge student loan debt via bankruptcy, they must submit to and pass what is known as the Brunner test, which is based on a standard of extenuating circumstances that are likely to continue for the term of the loan, and that the borrower has made good faith attempts to repay the loan (even if they were unable to actually pay what they owed.) Following this application, the applicant has to pursue a lawsuit in bankruptcy court called an Adversary Proceeding and hope that it is approved.

The current prohibition on discharging student loans has only been in place since 1976 when the laws changed restricting bankruptcy to those loans that had been in repayment for five years or more. Over the years those restrictions became even more challenging until dischargeability became prohibited in 1998 barring extreme hardship. So what can a person buried under student loan debt do?

There are some indications that bankruptcy judges may be taking a kinder view of those who are appealing to them for help, but that assistance may fall short of what debtors need: it includes free legal counsel, elimination of tax bills that add insult to injury, cancelling debt for loans for education derived from unaccredited schools, and various mechanisms to extend or adjust the amount of payment.

There are also strategic repayment plans available that an experienced bankruptcy attorney can guide you through. For more information, contact us today to set up an appointment.