Student Loans & Bankruptcy: What Stays & What Goes?


It is a common assumption that all debt gets discharged in bankruptcy, regardless of what it is or how it was acquired. Unfortunately, this isn’t always the case and discharging student loans may be easier said than done. While it is certainly not impossible, federal law does make it difficult to successfully eliminate student loan debt when you file for bankruptcy.

This is why it is so important to understand the details before you decide to file. If you’re looking at bankruptcy as a way out of the debt you acquired in college, proceed with caution. The following information can help you make an informed decision that you will feel comfortable with well into the future.

The Brunner Test and What it Means for Student Loan Debt

In order to successfully discharge student loans in bankruptcy, you must prove that payment of the debt “will impose an undue hardship on you and your dependents.” There are different ways of evaluating this, but one of the most common is the Brunner test.

The Brunner test requires proof of three things:

  • That the debtor cannot maintain, judging by current income and expenses, a “minimal” standard of living for themselves and dependents if forced to repay the student loans.
  • That there are additional circumstances which imply that this state of affairs will persist for a considerable portion of the repayment period.
  • That the debtor has made good faith efforts to repay the student loans.

By successfully proving these three things, your student loan debt will be permanently erased. Additionally, even just filing for bankruptcy offers automatic protection from collection actions on your student loans until the case is resolved or the creditor gets permission to move forward with collection attempts.

Make the Right Decision with Our Firm's Help

Filing for bankruptcy is a big decision that should not be taken lightly and it is normal to feel overwhelmed as you consider your options. But with a Boca Raton bankruptcy attorney on your side, you don’t have to go through this process alone.

With nearly 20 years of experience, our firm is equipped to answer your questions and point you in the right direction. From helping you file your adversary proceeding petition to defending your best interests along the way, we are here for you.

Call the Law Offices of David Kovari, P.A. today to take advantage of your free consultation!