Let’s Ask ESSER: Am I able to get rid of my student loans debts by declaring bankruptcy?

Q:
Am I able to get rid of my student loans debts by declaring bankruptcy??
– Darryl in Brookfield

A:

Since 1982, multi award winning attorney Todd C. Esser has been leading the field, serving the community, and helping consumers just like you achieve success through trying financial times.

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:

1. An inability to maintain minimal standard of living for self and dependents if forced to repay loans,
2. That additional circumstances exist indicating that state of affairs is likely to persist for significant portion of repayment period of student loans, and
3. That the debtor has made good faith efforts to repay loans.

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