It is very difficult to discharge most student loans in bankruptcy of any chapter. Any student loan guaranteed by a government or nonprofit is not dischargeable unless you can prove an “undue hardship.” In our bankruptcy courts, this determination is mostly determined using the “Brunner Factors” which is derived from a case of the same name. These are the 3 factors:
Poverty. Based upon your current income and expenses, you cannot maintain a minimal standard of living for yourself and your dependents if you are forced to repay your loans.
Persistence. Your current financial situation is likely to continue for a significant part of the repayment period.
Good faith. You have made a good faith effort to repay your student loans.
So if you’ve been trying to pay it, and something horrible has happened that will keep you in poverty for a long time, you can get the student loans discharged, but only after you sue your student lenders.
Most of the time if you meet the Brunner criteria you don’t have the funds to hire an attorney to battle your student lenders in court, if they want to fight it. Also, if you’re that bad off, there’s really not a whole lot the student lenders can do to collect anyway, making the whole effort of questionable utility.
All the above makes it seem hopeless, but it’s really not. There are billions of dollars of distressed student loans out there and programs for those hard pressed to pay outside the bankruptcy arena. One such program is called an “Income Based Repayment Plan” that not only reduces payments, but get you back in good standing with the possibility of ultimate long term forgiveness.
You can inquire into it here: http://www.studentloanservice.us/leverlaw/
There are other strategies for dealing with student loans that you should discuss with your bankruptcy attorney as part of the bankruptcy process.
