While it is true bankruptcy can help a person get a fresh financial start, some debts are immune to a bankruptcy discharge. One of those non-dischargeable debts is student loans; it doesn’t matter if a person works with a bankruptcy lawyer in St. Louis, MO to file chapter 7 or chapter 13, student loans will generally continue to be due after the case closes. However, the court may discharge a student loan balance if the person can prove paying the debt would be too much of a burden for him or her.
Hardship Discharge Exception
To have a student loan debt discharged, an individual must show the court that paying the debt represents an undue burden on him or her. To determine if the person is eligible for this type of exception, the court will apply what’s called the Brunner Test, which is a list of factors that must be true in the person’s situation in order for him or her to qualify for a hardship discharge. These factors are:
* Significant poverty
* The person is unable to maintain a minimum standard of living if he or she were made to repay the loans. This is based on the person’s income and expenses after taking bankruptcy into account.
* Persistent circumstances
* The person’s financial circumstances is likely to continue to be the same for all or most of the repayment period.
* Attempted Payments.
* The person made a good faith effort to repay his or her student loans.
If all of these factors are true, then the court will typically grant the request to discharge some or all of the person’s student loan debt.
Filing for a Hardship Discharge
To take advantage of this option, the person must file a motion called a Complaint to Determine Dischargeability. Once the petition is received by the court, there will be a hearing where the plaintiff and/or the bankruptcy lawyer in St. Louis, MO representing the individual will present evidence showing the person’s eligibility for the discharge.
Getting student loans discharged is very challenging. To increase the chances of success, it’s best to work with a bankruptcy lawyer in St. Louis, MO to develop an effective case that sways the court.
