Student Loans & Hardship Discharge?

[StaciMM]

I'm just curious... I am 99% certain I wouldn't qualify.

Anyhow, what are the requirments, steps for having student loans discharged as undue hardship to repay? How often does that happen?

[HHM]

Procedurally, you, the debtor, would file a Complaint in bankruptcy court to discharge your student loan for undue hardship. A hearing would be set, and the burden of proof would be on you to prove to by a perponderance of the evidence that to continue to be liable for the student loan would cause an undue hardship.

There are 2 tests the courts apply to the student loan issue

1. For the foreseeable future, does the debtor have sufficient income (from all sources) to live above a subsistence level. If yes, the court will deny your discharge request, if no, the court moves to test 2

2. Good faith. You have to show that you have made good faith attempts to pay the student loan and basically exhausted all the programs available to help with student loans (i.e. deferments, refinance etc).

The good news is, some courts have held that you may reopen your bankruptcy to lititgate the dischargeability of the student loans if your circumstances change to create and undue hardship.

[Printer099]

i CAN tell you realistically the only way you can discharge student loans is if you cannot work at all, because of some involuntary physical accident, this is an exception that is almost impossible to meet

[HHM]

i CAN tell you realistically the only way you can discharge student loans is if you cannot work at all, because of some involuntary physical accident, this is an exception that is almost impossible to meet

In a nut shell, that is correct. Or altenratively, that by continuing to have to pay the students loans, you would be in the poor house for a long time.

[alberto2005]

Hello, there!

Emotional illnesses that prevents someone to work is another form of getting a discharge from student loans.

Best,

Albert L.

[HHM]

Hello, there!

Emotional illnesses that prevents someone to work is another form of getting a discharge from student loans.

Best,

Albert L.

LOL, true, but it probably has to be well documented and chronic.