Bankruptcy On Student Loan Debt

Bankruptcy On Student Loan Debt

If you are dealing with student loan debt, you might be worried about the potential consequences of filing for bankruptcy. In the past, it was much harder to get rid of student loan debt through bankruptcy. However, there are some recent changes in federal law that make it easier to have your student loans discharged. Still, this is not an easy process and will require that you prove undue hardship—that is, that your loans cause such a significant burden on your finances or future opportunities that they should be erased by the courts. If you believe that this situation applies to you, read on: We’ll go over what undue hardship means for bankruptcy filings, how to prove it and how much time will pass before any action can take place once a case has been filed by someone seeking this type of relief from their federal student loan obligations

In the past, it was much harder to get rid of student loan debt through bankruptcy.

In the past, it was much harder to get rid of student loan debt through bankruptcy. Before 2005, you had to prove that repaying your loans would leave you completely destitute. This meant not just poverty but also homelessness and starvation—not something most people can prove easily (or at all).

Nowadays, though, judges are more lenient about what constitutes “undue hardship” in this context. The standards are still strict but not unreasonable; after all, if a person can afford their minimum monthly payments or even make some extra payments each month but still not pay off the entire balance within seven years of entering repayment on their loans—which is very common—then it would be unreasonable for them not to be able to discharge their debts through bankruptcy under current law.

Now, you have to take steps to prove that your loans are an “undue hardship.”

For this reason, a student loan discharge is not automatic. Now, you have to take steps to prove that your loans are an “undue hardship.”

In order to do so, you must file a petition in bankruptcy court. This means that if you’re considering filing for bankruptcy on your student loans and want to get relief from them, then it’s time for you to talk with an experienced attorney about your options and what should be done next.

Your attorney will help guide you through the process of filing for bankruptcy on student loans. In order for them to be discharged under Chapter 7 or Chapter 13 (the two most common types), they must meet certain requirements:

You can use the Brunner test to determine if you qualify for undue hardship.

The Brunner test is a three-part test that determines whether or not you qualify for undue hardship.

• First, you must be able to maintain a minimal standard of living if forced to repay the loan.
• Second, you must show that you will be unable to maintain this situation for a significant portion of the repayment period.
• Third and finally, there must be no reasonable alternative other than bankruptcy relief (which includes student loan discharge).

This test considers three factors to determine if your loans cause undue hardship.

The test considers three factors to determine if your loans cause undue hardship.

• Your income and expenses, including a calculation of the difference between them in your budget. You’ll need to include information about your assets, debts and living expenses.
• The amount of time you have before loan payments are due (the repayment period).
• Whether you’ve made good faith efforts to repay the loans for which you’re requesting bankruptcy discharge under Chapter 7 or Chapter 13 bankruptcy.

First, it tests your ability to maintain a minimal standard of living if forced to repay the loan.

Before you can file for bankruptcy, you must prove that it’s impossible for you to repay your student loans. The court uses the Brunner test to determine whether or not this is true. The first part of this test states that undue hardship must be shown if the debtor is unable to maintain a minimal standard of living if forced to repay their student loan debt. To determine whether or not this is true, the court will look at your current income and expenses—including what percentage of your income goes towards paying off monthly bills like rent, utilities and groceries; how much money remains after these payments have been made; and what assets (like savings accounts) you might have that could help with repayment costs.

The second part deals with more specific factors:

• Your future earning potential—if it’s less than $75 per week then undue hardship may exist because there isn’t enough income coming in each month even when considering other sources such as employment assistance programs like welfare benefits or disability assistance programs like Social Security Disability Insurance benefits

Next, it considers whether you will be able to maintain this situation for a significant portion of the repayment period.

The means test is a measure of your ability to pay back your student loans. The court uses this test to determine whether you will be able to maintain this situation for a significant portion of the repayment period. This means that if you have no income or money coming in, and are unable to find work, you may qualify for bankruptcy protection.

Once the court determines that your debts outweigh your assets (which may be determined based on what’s in your bank account), it then calculates how long it would take for you to repay all of these debts under Chapter 13 bankruptcy protection; if this amount is more than five years, then you won’t be eligible for Chapter 13 debt relief because it’s considered too long of an amount of time given today’s economic conditions.

Finally, it examines whether you made good faith efforts to repay.

Finally, you must have made a good faith effort to repay your loans. This means that you must have taken reasonable steps to repay your student loans. For example, if your credit score is poor and getting it back on track would help you improve your chances of paying off the loan, then it is in your best interest to do so. You may be asked about these efforts by the court during bankruptcy proceedings or by a lender who has filed a claim against you.

It also helps if you can show that:

• You were unable to pay back this debt because of an unexpected event (like losing a job) or an accident (such as being hit by another vehicle).

You may be able to get rid of student loan debt through bankruptcy if your loan is determined to cause an undue hardship

If you are unable to pay your student loans, you may be able to discharge them through bankruptcy. This can be done if the loan is determined to cause an undue hardship. The Brunner test is used by courts to determine whether or not a debtor has met this standard. In order for your student loan debt to be discharged, as opposed to being restructured or paid off over time through monthly payments, you must prove that:

• You cannot maintain a minimal standard of living if forced to repay your student loans; and
• That additional circumstances exist which would make it impossible for most people in similar situations as yours would find it impossible for them too.

If you have student loan debt and want to get rid of it through bankruptcy, there are some steps you can take. First, you should consider how much money you owe on your loans. If this is more than $17,500 in total, then it’s likely not worth filing for bankruptcy unless there are other reasons why you would want to do so (such as protecting other assets). Second, if you think your loans cause an undue hardship for any reason—such as excessive interest rates or because they make it impossible for you to pay off other debts—then it may be worth exploring whether filing under Chapter 7 could help relieve these issues before paying anything back at all!