In this article, you can discover:
- The difficulty of discharging student loan debt in bankruptcy,
- The three elements you need to prove to be eligible for student loan forgiveness, and
- Alternative options to handle student loan debt outside of bankruptcy.
Can You Discharge Student Loan Debt In Bankruptcy In 2023?
You can discharge student loans in bankruptcy, but it is difficult. Although there is a push for change, the high standard for discharging student loans remains the same.
What Do You Need To Prove To Discharge Student Loans In Bankruptcy?
To discharge student loans, you must prove an inability to pay, the persistence of your financial situation, and good faith in trying to make payments. You must also attempt the income-driven repayment plans offered by studentloan.gov.
What Are the Income-Driven Repayment Plans?
Income-driven repayment plans can reduce your monthly payment to a percentage of your income for up to 25 years. At the end of the repayment period, any remaining balance is forgiven for federal loans.
Can The Court Rule On Discharging Student Loans Based On The Totality Of The Circumstances?
The court can review the totality of the circumstances through a motion; however, it usually requires meeting the three elements of the Brunner Test to discharge student loans. These elements are…
- Proving that repaying the loan would cause the debtor to be unable to maintain a minimal standard of living,
- Demonstrating that this financial situation will likely persist for a significant portion of the loan repayment period, and
- Showing that the debtor has made a good-faith effort to repay the loan.
If these three elements are not met, the court will unlikely discharge the student loans.
What Are Some Alternatives To Discharging Student Loans In Bankruptcy?
Alternatives include deferment or forbearance, public service jobs, or teacher loan forgiveness and repayment assistance programs for specific communities.
For more information on the Inclusion Of Student Loan Debt In Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you seek by calling (847) 440-5998 today.