Question 1

Can I discharge student loans in bankruptcy?

Accepted Answer

Yes, but it requires filing a separate lawsuit called an adversary proceeding within your bankruptcy case. You must prove that repaying the loans would cause 'undue hardship.' Recent DOJ guidance has made this easier, and courts are increasingly willing to discharge student loans, especially for borrowers with health issues or low earning potential.

Question 2

What is the Brunner test for student loans?

Accepted Answer

The Brunner test is a three-part legal standard that courts use to determine if student loans can be discharged in bankruptcy. You must prove: (1) you cannot maintain a minimal standard of living and repay the loans, (2) your financial hardship is likely to persist, and (3) you have made good-faith efforts to repay.

Question 3

Can private student loans be discharged in bankruptcy?

Accepted Answer

Private student loans face the same 'undue hardship' standard as federal loans, but borrowers may have a stronger case because private loans lack income-driven repayment options, deferment programs, and Public Service Loan Forgiveness. Courts increasingly recognize that the absence of these protections supports a finding of undue hardship.

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