Overwhelming debt has many causes and even more contributing factors, and one of the most common contributing factors in bankruptcies being filed today is the burden of student loan debt. The average amount of student loan debt in America today is $38,390. This is a staggering amount for any one individual to owe, but if you add to that another factor such as a medical emergency or credit card debt, it is not hard to see how things can get out of control.

If you are considering filing for bankruptcy and student loan debt represents a significant amount of the monies that you owe, you may be hoping that the fresh start that bankruptcy offers will include making your student loan debt disappear. Unfortunately, that only happens where the individual is able to prove that paying off the debt would cause an undue hardship.

“Undue hardship” is a term of art used in law. In order to pass the test that determines whether you are actually suffering undue hardship, you will likely have to prove all three factors of a test known as the Brunner Test.

To pass the Brunner Test, you need to be able to show the following three things:

  • That you are living in a state of poverty, and if forced to pay back the debt you would be unable to maintain a minimal standard of living for yourself and your dependents.
  • That you do not anticipate a change in your financial situation during the majority of the required repayment period.
  • That you have made a good-faith effort to repay your student loan debt but have been unable to do so.

Upon a review of your circumstances based on the Brunner Test, there is a chance that the bankruptcy court may agree to discharge either all or part of your student loan debt. There are also other tests, including the Totality of the Circumstances Test which looks at all of the factors involved in your bankruptcy to determine whether you should have your student loan debt discharged, and the special test for Health Education Assistance Loans for loans that were due more than 7 years earlier and which would impose an “unconscionable” burden on the debtor’s life.

Though getting a student loan debt discharged in bankruptcy is difficult, it is not impossible, especially if you are working with an experienced bankruptcy attorney. For information on how we can help you get a fresh start, contact us today to set up an appointment to discuss your situation.

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