One of the most common questions we get from college graduates is whether or not student loans can be discharged and eliminated through bankruptcy. It’s no wonder why this is such an important question, especially when you consider that tuition rates and student loan debt are at all time highs.
Sadly for these students, however, student loan debt is very difficult to eliminate during bankruptcy – but it is not impossible. In fact, while most student loans are not dischargeable, under certain circumstances it may be possible to eliminate all of your student loan debt by filing for bankruptcy.
The Brunner test
In Tennessee, you will be able to eliminate student loans if you can prove that you will suffer an “undue hardship” if you are forced to repay them. When determining whether an undue hardship exists, Tennessee bankruptcy courts apply the three-part Brunner test. The elements of this test include:
- Based on your current expenses and income, you cannot maintain a “minimal” standard of living for either yourself or your dependents if you have to repay your student loans
- Additional circumstances are present indicating that your poor financial situation is likely to continue for a large portion of your student loan repayment period
- You have made a good faith effort to repay the student loans
It is crucial to note that you, the debtor, have the burden of proving these three factors. If you can’t, the student loan debt will not be discharged, it is as simple as that. However, every case is different and must be analyzed based on its own set of facts, which is why you should never give up.
Contact an experienced bankruptcy attorney today to learn what options may be available to help you deal with overwhelming student loan debt. Even if your student loans are not dischargeable, bankruptcy may still be able to help eliminate other debt such as medical debt and credit card bills – thereby freeing up money to pay off your student loans.