As a bankruptcy attorney in Orlando, FL I am often asked “I have student loans that I cannot afford. Are they dischargeable in a bankruptcy filing?” My initial response to this question is “probably not.” But, there are exceptions!
The applicable Section of the Bankruptcy Code in regards to Student Loans is Section 523(a)(8). Section 523(a)(8) “provides that student loans generally are not to be discharged. A narrow exception is made, however, where ‘excepting such debt from discharge…will impose an undue hardship on the debtor and the debtor’s dependents.”
Undue hardship is a mixed question of fact and law. The Bankruptcy Code does not define “undue hardship.” In other words, it is considered on a case by case basis. In analyzing the dischargeability of student loans, the Court relies upon the requirements governed in Brunner v. New York State Higher Education Services, Corp., and interpreted by the Eleventh Circuit in Hemar Ins. Corpo. Of Am. V. Cox., “stating that the Debtor must demonstrate by the preponderance of the evidence:
- 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;
- 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
- That the debtor has made good faith efforts to repay the loans.”
This is otherwise known as the Brunner Test. How would this apply to you? As stated above, “undue hardship” is analyzed on a case by case basis.
The Orlando bankruptcy attorneys at Tudhope Law. have firsthand experience litigating the dischargeability of student loans. If you want to learn more about your student loans and how it could be interpreted under the Brunner Test, please contact our office and speak with an attorney. We would be glad to sit down with you to discuss this related matter, as well as all your different options as it relates to your specific goals and needs.
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If you are facing bankruptcy and you have student loans contact us today! Erin Tudhope, a bankruptcy attorney in Central Florida, has extensive experience in all aspects of bankruptcy law and will carefully analyze your case to determine and discuss your options. We are available at (407) 969-0044 (Maitland Office minutes away from downtown Orlando) and at (407) 944-9969 in Kissimmee. You may also fill out the online form provided in this page and we will contact you shortly.