Although student loans are typically considered “untouchable” by bankruptcy because they’re a secured debt like tax debt, there are some circumstances that allow borrowers to have their student loans discharged. To be eligible, you must meet certain criteria. More specifically, borrowers must pass the Brunner Test. Here’s how you could get your student loan discharged in a bankruptcy.
What is the Brunner Test?
The Brunner Test is a simple one. However, many people do not meet the three criteria required to discharge a student loan:
- You made every effort to repay your student loans. You must show the court that you maintained good standing with your lender by attempting to pay back your loans. Or, if you could not pay the loan, prove you requested a forbearance or deferment in a timely manner. Individuals who allow their loan to default and never communicated with the lender may not be considered to have made the honest effort to repay.
- Your financial situation makes you unable to repay your student loans without experiencing undue hardship. You must be able to show that making payments on your student loans means you can’t maintain a basic standard of living. Basic standard of living means paying for housing, groceries, utilities, and other necessities.
- It is not possible for you to resolve your financial situation during the repayment period of the loan. You must show that whatever situation you’re in is expected to continue for most of the repayment period.
Very few circumstances actually meet all three of the above criteria, however, some do. For example, if you are injured on the job and become disabled, you may live on a fixed income for the remainder of your life. If this income only allows you to pay for basic necessities, you may be able to pass the Brunner Test.
Contact the Law Office of Howard Tagg Today
At the Law Office of Howard Tagg, we can help you determine if your financial situation meets the Brunner Test criteria. If it does, we also may be able to help you get your student loan discharged. If you do not pass the test, you may still be able to file for bankruptcy and have other debts eliminated so you will have more funds to pay your loans with. Either way, we can help. Call now for a consultation at (903) 581-9961.