Student Loan Discharges - Bankruptcy

You have probably heard that student loans are difficult, if not impossible, to discharge in bankruptcy.  While it is difficult to discharge student loans in bankruptcy, it is certainly not impossible.  In order to discharge a student loan in bankruptcy, the borrower must show that the payment of the student loan – whether a federal or private student loan – will result in an undue hardship on the borrower and the borrower’s dependents.  Courts around the country use different tests to evaluate whether a particular borrower has shown an “undue hardship”.

The most common test is the “Brunner Test”, which requires a showing that: (a) the borrower cannot maintain, based on current income and expenses, a “minimal” standard of living for the borrower and the borrower’s dependents if forced to repay the student loans; (b) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (c) the borrower has made good faith efforts to repay the loans.  This is based on a 1987 Circuit Court decision.  This the test that is commonly used by United States Bankruptcy Courts in Florida.

However, much has changed since 1987, and some courts have begun to question whether a more relaxed and realistic standard should be used.  If an undue hardship can be proven, your student loans will be discharged.

Even without a discharge, bankruptcy can help many student loan borrowers. The bankruptcy automatic stay, which can last anywhere from a few months to five years, depending on the type of bankruptcy filed, can be a huge benefit for borrowers who are drowning in student loan debt.  It is very important to seek advice from a bankruptcy and student loan attorney who understands the various tests employed by the courts, and who can best advise you regarding your options.

The attorneys at Leiderman Shelomith Alexander + Somodevilla, PLLC can help.  Call us today at (954) 920-5355 for a no cost consultation to discuss whether your student loans may be dischargeable in bankruptcy.

Leiderman Shelomith Alexander + Somodevilla, PLLC

Fort Lauderdale

2699 Stirling Road, Suite C401
Fort Lauderdale, FL 33312

T. 954-920-5355 | F. 954-920-5371

Miami

2 South Biscayne Blvd, Suite 2300
Miami, FL 33131

T. 305-894-6163 | F. 305-503-9447

© 2019 Leiderman Shelomith Alexander + Somodevilla, PLLC. All Rights Reserved. | Law Firm Essentials by PaperStreet Web Design

The hiring of an attorney is an important decision that should not be based solely on advertisements. Before you decide, ask us to send you free written information about our qualifications and experience. The information contained on this website does not constitute legal advice and is intended for general informational purposes. Also, the information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney client relationship. Also, the information contained on this website is not intended to be an advertisement and any unauthorized use of the information is at the user's risk. Reproduction, distribution, republication and retransmission of any material contained on this website is prohibited without the express written consent of Leiderman Shelomith Alexander + Somodevilla, PLLC.