Student loans can be discharged in bankruptcy, but they do not receive an automatic discharge, you must prove to the court that the payment of your student loans is putting you through undue hardship. This is a difficult standard to meet, with different courts applying it in different ways. However, people have successfully applied this test before to discharge their student loan debt in bankruptcy. Please read things to do when filing bankruptcy

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FILING FOR CHAPTER 7 BANKRUPTCY IS YOUR LEGAL SOLUTION TO A FRESH START

The United States Of America’s Federal Bankruptcy Act was created to protect you when you cannot afford to meet your financial obligations with your creditors. The following are examples of what filing for Bankruptcy protection can do for you.

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The Brunner Test for Undue Hardship

One test commonly used by courts to determine whether undue hardship exists is the Brunner test. The court will look at three factors when applying the Brunner test:

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FILING FOR BANKRUPTCY IS YOUR LEGAL SOLUTION TO A FRESH START

While some Chapter 7 debtors choose to file their bankruptcy without an attorney, you may want to consult with an attorney if you are attempting to discharge a significant amount of student loan because your case will be more complicated than a typical Chapter 7 case.

To meet the first prong of the Brunner test, you will have to show that you have a low standard of living and are still not able to make ends meet due to your student loan debt payments. You may not need to show that you are living in poverty, but you will have to account for all of your expenses and show that you are living modestly and spending your money responsibly.

The second prong requires a showing of persistence. Essentially, you must show that you are not just experiencing temporary financial difficulties and that your financial situation will probably not improve. If you have earned a low income for many years, or if you are approaching retirement age, this could help to show that your financial difficulties are likely to persist.

Finally, the last prong requires that you have made a good faith attempt to repay your loans. Those that have made payments on their loans for many years may have a better case for proving this factor.

The presence of medical issues, disabilities, or fraud on the part of the educational institution may also help you prove your case of undue hardship caused by student loan debt. For more information about student loan debt discharged in bankruptcy, consult with a bankruptcy attorney.

Lg Law Ontario has the best bankruptcy attorneys you can find. They can help you decide whether filing a Chapter 7 bankruptcy or Chapter 13 bankruptcy case is right for you. Call 1 888-901-5240 to schedule your free consultation. If your not convince why you should file bankruptcy in 2018 please read here.