Y’all have no idea how I wish this were possible! But if you’ve been researching how to discharge your student loans in bankruptcy for any length of time then you know that it’s darn near impossible to do so.
But if you’re curious on how one would go about it, check this out. You have to pass a few tests that prove undue hardship and the specifics are anything but clear:
The most popular test, Brunner, requires a debtor to show that his loan payments would require him to sacrifice a “minimal standard of living” into the future and that he has made good faith attempts to repay the debt. But what is a minimal standard of living? How is future inability to pay predicted? And what constitutes good faith efforts to repay?
The Johnson test requires a debtor to first demonstrate a current and future inability to make loan payments. She must also show that her living expenses are reasonable. She must then show either that she has made good faith efforts to repay or that she has received little financial benefit from her education and discharging student loans is not her overwhelming reason for filing bankruptcy. Got that? Like Brunner, critical elements of the Johnson test are based on ambiguous and subjective concepts.
Some courts take a “totality of the circumstances” approach. These courts attempt to account for factors relevant to assessing a debtor’s prospects for repaying their student loans, but they also embrace the subjectivity and moral judgments that lead to inconsistent undue hardship determinations. – Source
Even with impossible tests, is there a way for debt weary students to discharge their debt in bankruptcy? Check out the infographic below to find out:
Would you get rid of your loans in bankruptcy? Is this a free ticket to debt freedom or should students be responsible for the debt they piled on while in school?