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Finally, there is a way to discharge , eliminate or reduce Federal student loans in bankruptcy.

Student loans may be discharged in bankruptcy IF they represent an undue hardship to you. Most of us would agree that large student loans are typically quite a hardship to pay. For many years the legal burden of proving that student loan debt was an “undue hardship” has been quite difficult. In fact, though I had been a Board Certified Consumer Bankruptcy lawyer since 1999, I had only been able to help my clients meet this burden five times and these clients were totally disabled, with only Social Security Disability income.

Did Congress pass a law to make discharge of student loans easier? No, but President Biden essentially directed the U.S. Attorney’s General’s Office to loosen the criteria for its definition of “Undue Hardship”. This loosening of the requirements may only exist for a very limited period of time and if a new administration should come into the White House, then these “loosened” requirements are sure to be discontinued. I think that these matters should be filed as quickly as possible since this opportunity may not last long.

Now and perhaps for a limited time only, under current rules we need only prove the following:

  1. That the debtor is unable to maintain a minimal standard of living for themselves andtheir family with their current income and living expenses
  2. That there is no reasonable likelihood of a change in the debtor’s other expenses or their income during the term of the student loan
  3. The Debtor has attempted to make payments with “good faith’ efforts.

The U.S. Attorney General’s Office estimates that debtors will be able to discharge student loans in bankruptcy in 80% of the filed cases.

There is a considerable amount of work to be done in order to accomplish discharge of student loan debt including the filing of an adversary complaint (lawsuit) in the US Bankruptcy Court.

As a Board Certified Consumer Bankruptcy lawyer, I have extensive experience in the discharge of student loan debts, tax debts and other specialized debts. Please feel free discuss these and other matters with me by simply calling to schedule a free consultation.