Am I able to get rid of my student loans debts by declaring bankruptcy??
– Darryl in Brookfield
Generally speaking, student loan debts are not affected by the discharge in bankruptcy. However, under special circumstances, an individual can request that the Bankruptcy Court discharge a student loan obligation. The bankruptcy code provides: “unless excepting such a debt from discharge under this paragraph would pose an undue hardship on the debtor and the debtor’s dependents…” However courts interpreting this section have applied a very strict standard and held that in order for there to be an undue hardship the debtor must show several factors as follows:
- An inability to maintain minimal standard of living for self and dependents if forced to repay loans,
- That additional circumstances exist indicating that state of affairs is likely to persist for significant portion of repayment period of student loans, and
- That the debtor has made good faith efforts to repay loans.
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