Student debt is weighing on you like a baby grand piano on your back. You honestly have no idea how you can make payments. You’re considering throwing up your hands and declaring bankruptcy to rid yourself of the unworkable debt. But not so fast. There are a few things you need to know before you go down this path.
Who can have loans discharged?
In order to have your student loans discharged, you must show that paying them would cause an “undue hardship” for you and/or your dependents. Generally speaking, in practice this is a very tough standard to reach.
How is hardship determined?
Each court can determine what standard they use to determine undue hardship. A common measurement is known as the Brunner test. Under this test, you are allowed to discharge your student loans only if:
- You cannot maintain a minimum standard of living for yourself or your family because of a very low income
- Your current financial hardship is likely to endure for the life of the loan
- You have made a concerted effort to repay your loans
Other tests bring different factors into the equation, but in general the recurring themes are a very low income and a financial situation that will probably remain difficult.
How do I know if I can discharge?
Given the varying methods for handling these types of cases, your best bet is to consult with a bankruptcy attorney in your area who has experience dealing with student loan issues. If you’re worried about the cost of using the services of an attorney, research organizations that provide free or low cost help in your area, such as Legal Aid.
If you feel like the above hardship criteria apply to your situation and you don’t foresee being able to pay back your loans, you should definitely get in touch with an attorney. Just know that you’ll need to show evidence of your difficult situation and that the going may be tough.