Vivian M. Williams & Associates, P.C.

Defending People's Rights & Freedoms




For Westchester Office Call


Would My Student Loan Be Discharged in Bankruptcy?

Student loans are generally NOT dischargeable in any of the bankruptcy chapters. Before 1998 student loans that were in pay status for seven or more years could have been discharged in bankruptcy. The law changed in 1998 making student loans non-dischargeable regardless of the length of time that payments were being made on it.

Are There Any Exceptions That Would Allow My Student Loan to Be Discharged?

Like most laws, there are exceptions to the student loan rule. These exceptions allow for the discharge of student loans in bankruptcy in a few very limited situations. For instance the debtor may obtain a discharge of his or her student loan if repaying the loan would result in substantial hardship to the debtor and his or her family. Substantial hardship usually means that the debtor in a bankruptcy case cannot repay the student loan and maintian a minimally adequate standard of living.

What Precisely I Should Look for Determine If I Have Substantial Hardship?

The test applied by the court for substantial hardship also referred to as undue hardship requires a three-part showing: (1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for herself and her dependents if forced to repay the loans; (2) that 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 (3) that the debtor has made good faith efforts to repay the loans.