While many types of debt are dischargeable in a Chapter 7 or Chapter 13 bankruptcy, certain debts are not dischargeable, such as student loans in bankruptcy. Unfortunately, no part of your student loans are able to be discharged, no matter which chapter of bankruptcy you file. Bankruptcy law provides that student loans in bankruptcy are one of the several non-dischargeable debts through bankruptcy. See bankruptcy law 11 U.S.C. § 523. However, there is one exception to this non-dischargeability rule: if you prove to the court that you suffer from an “undue hardship,” you may be able to have your student loan debt discharged. This “undue hardship” usually pertains to debilitating medical conditions, but could be from a different form of hardship. Proving undue hardship can be difficult, if you need assistance with student loans in bankruptcy it is highly recommend to retain a Tampa bankruptcy law firm to assist you.
Discharging Student Loans in Bankruptcy
In bankruptcy case Brunner v. NY State Higher Educational Services, the Undue Hardship Test was established for student loans in bankruptcy. Under the Brunner test, in order to have student loan debt discharged, the debtor must prove that (1) he or she cannot maintain a “minimal standard of living”; (2) the debtor is undergoing special circumstances beyond the debtor’s control, and those conditions are likely to continue throughout the student loan repayment period; and (3) the debtor has, in good faith, tried to repay the loan. If you can satisfy all three of those requirements, a judge may declare your student loans in bankruptcy are dischargeable. Passing the Brunner Test for student loans in bankruptcy can be difficult. Therefore, if you need assistance with student loans in bankruptcy contact a Tampa bankruptcy lawyer for assistance.
Student Loans in Bankruptcy: The Chapter 7 Means test
Additionally, student loan payments are not considered an allowable monthly expense under the Means Test. Student loans in bankruptcy are often not considered in the Means Test because (1) the Bankruptcy Code does not allow it; and (2) most bankruptcy judges do not look at student loan payments as an expense this is “reasonable and necessary” for the maintenance of yourself and your dependents. If you try and include your student loan payments in your Means Test calculation, a judge will most likely kick it back for recalculation, or the inclusion of the expense may even cause you to fail the Means Test and not qualify for Chapter 7.
Including such payments in your Means Test calculation also establishes a “presumption of abuse,” which allows a court to dismiss your case. The Means Test can be difficult to master, especially if you have a case involving student loans in bankruptcy. You should consult with a Tampa bankruptcy attorney for assistance with the Means Test.
Tampa Bankruptcy Law Firm
If you are having a difficult time meeting your financial obligations Florida Law Advisers may be able to help. The bankruptcy attorneys at our firm have years of experience helping people just like you to solve their financial problems and obtain a fresh start. We have many options available that can help you successfully manage student loans in bankruptcy and regain your financial health. Regardless if you need help with Chapter 13, Chapter 7, or other debt relief, our professional legal team will provide you with competent legal advice you can trust. To see which options may be available to you, contact us to today to schedule a free, confidential consultation with a Tampa bankruptcy attorney at our firm.