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Michael D. Hart, P.C.
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How to discharge a student loan through bankruptcy

Virginia residents may wonder if student loans can be eliminated through bankruptcy. The quick answer is no. However, there are some exceptions to the rule.

The current regulations were established by the Bankruptcy Abuse Prevention and Consumer Protection Act, which was signed by President George W. Bush in 2005. This act exempts federal and private student loans from discharge when a person files for bankruptcy. Some say that this stipulation is to prevent borrowers from taking advantage of bankruptcy laws.

One exception to the rule is demonstrating undue hardship. The Brunner test, which is used by most states to determine undue hardship, will show if a person has extenuating circumstances that make it impossible for them to repay the student loan and maintain a minimum standard of living. To pass this test, the circumstances will be unlikely to change and one must have made good faith efforts to repay the loan.

In addition to using the Brunner test, courts may take into consideration the life circumstances and finances of a borrower, including the person's age, health and income. An Adversary Proceeding must be filed in order for a person to have a student loan discharged through bankruptcy. Both private student loans and federal student loans may be eligible for discharge if undue hardship can be demonstrated.

Individuals who are interested in discharging student loans through bankruptcy may benefit from speaking with a bankruptcy lawyer. An attorney may be able to provide legal counsel, explain paperwork and, if necessary, represent their client in court.

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Michael D. Hart, P.C.
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Roanoke, VA 24011

Phone: 540-627-6520
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