There are a couple of things that people believe you can’t include in a bankruptcy. In general, these debts aren’t normally discharged in bankruptcy, but there are exceptions. Our attorneys have the experience and skill to help make the process go a lot smoother and because of all the details involved, this isn’t something you want to attempt on your own. With that being said, it is possible to have student loans or a portion of student loans discharged in your bankruptcy, but it isn’t guaranteed, and it is rarely a simple process.
Rate of Success in Discharging Student Loans
There are varying rates of success when it comes to student loans and bankruptcy. In part, this is because people assume they can’t file on these loans, so they don’t bother to try. However, about 40% of those who file bankruptcy on their student loans are actually successful. Honestly, if you have to file bankruptcy anyhow, you may as well try to include any and all debts that you have since the goal is to wipe the slate clean and start over. Further, you may be in a situation where you truly aren’t able to pay your student loans even after bankruptcy.
What Is the Brunner Test?
The Brunner test is used to assess whether or not bankruptcy is something that is really necessary. When it comes to student loans, you have to be able to prove that you are unable to pay them back, so the Brunner test is used to try and prove this fact. It includes the scenarios listed below.
- You must be able to demonstrate that paying back the student loans would put such a strain on your current financial situation that you would not be able to meet the minimal standard of living.
- You must be able to demonstrate that your financial circumstances are unlikely to change in the near future.
- You signed a promissory note that demonstrated your willingness to pay back the loans within the guidelines set forth. To that end, you must have made a good faith effort to do so.
Filing bankruptcy on student loans is often considered to be filing a lawsuit within a lawsuit. It’s a very complicated process, but it usually involves a great deal of debt. This is one of the reasons you are always better off seeking an experienced bankruptcy lawyer who knows what’s best according to your circumstances and can help you reach the best possible outcome.
There are a number of myths regarding bankruptcy and one is that you can’t, no matter how in debt you are, include student loans. You should know that not only are many of the myths false but that with every debt and situation there are usually options that your lawyer can help you navigate.
Do you have student loans you can’t pay? Let us know in the comments. Make sure you share this information online with others who are trying to deal with student loan debt as well.