Will Filing For Bankruptcy Forgive My Student Loan Debt Too?
What’s Happening

LATEST BLOG

“We’ve Been Helping People from Merrillville and Northwest Indiana Get Out of Debt for 20 Years”

Will Filing For Bankruptcy Forgive My Student Loan Debt Too?

Will Filing For Bankruptcy Forgive My Student Loan Debt Too?
August 24, 2021

More than 43 million people in the United States have student loans, with an average of about $39,000 each in education debt. People take out these loans to achieve higher educational goals, but then they are saddled with this debt that they often cannot afford. 

Chapter 7 and Chapter 13 bankruptcy are often solutions to debt issues, but unfortunately, most people cannot get rid of their student loans as part of the bankruptcy process. Before you ever file a case, always discuss the nature of your debts – among many other factors – with an Indiana bankruptcy attorney.

Proving Undue Hardship

There are only a couple of ways that student loan debt might be dischargeable in bankruptcy, and the main exception is when a borrower can prove that paying back the student loan would cause undue hardship. You might think that – of course – making your payments is creating hardship, but there are specific legal tests to proving this in court. These include:

  • Brunner test – If you meet three factors, you can show undue hardship, which are living in poverty (being unable to maintain a basic standard of living on your income), your financial situation is expected to last for a significant time, and you made a good faith attempt to repay your loan. 
  • Totality of the circumstances test – The court reviews all relevant factors in your life to determine if your big picture warrants a finding of undue hardship from repayment. 
  • Other tests – Some courts might have other legal tests they use to find undue hardship, or other loans might have different standards. Your attorney can advise you how 

In order to even get the opportunity to prove undue hardship to try to discharge student loans, your lawyer will need to file for an adversary proceeding with the court. In the event your attorney can meet the standard for undue hardship, usually with the help of economic expert testimony, the court might decide that you can discharge your student loans in your bankruptcy case. 

Do You Have a Defense to Student Loan Repayment?

Some people might be able to raise legal defenses to avoid repayment of their student loan debt. Some defenses might include the following by a student loan company or school, particularly trade schools or vocational schools:

  • Breach of contract
  • Fraud
  • Deceptive or unfair business practices

If you can prove that a party engaged in wrongful conduct, the contract to repay the loan can be deemed unenforceable by a court, and you will no longer have to worry about proving undue hardship for a possible discharge. 

Speak with an Indiana Bankruptcy Lawyer About Your Student Loans

Even if your student loans are not dischargeable, bankruptcy might still help you if you have many other debts. Eliminating other payments can free up money that allows you to make your student loan payments easier moving forward. We can help at Kevin M. Schmidt, Attorney at Law, so please contact us today for more information.

Categories

MOST VIEWED

Archives

Schedule A Free Consultation

At the Law Office of Kevin M. Schmidt, P.C., we offer a free consultation during which we will examine the facts of your case and advise you on how best to proceed

  • 8 plus 1 =
  • This field is for validation purposes and should be left unchanged.
Our Phone Number219-756-0555
Contact via Emailinfo@kmslawoffice.net
Our Location200 E. 80th Place
Suite 110
Merrillville, IN 46410
We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code. This information is designed for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Past results and testimonials are not a guarantee, warranty, or prediction of the outcome of your case, and should not be construed as such. Past results cannot guarantee future performance. Any result in a single case is not meant to create an expectation of similar results in future matters because each case involves many different factors, therefore, results will differ on a case-by-case basis. By providing certain contact information herein, you are expressly authorizing the recipient of this message to contact you via the methods of communication provided.
Call Now Button