Student debt is one of the debts which does not get discharged during bankruptcy; neither in Chapter 7 nor in Chapter 13 unless you can prove that repaying them can cause undue hardship to you. According to Dallas based bankruptcy law firm https://bankruptcy.recoverylawgroup.com/, different tests are used by different courts to determine undue hardship. In the undue hardship test, most courts offer you to get either the entire loan discharged or nothing at all; while some courts might allow you a partial discharge of student loan. To get this loan discharged during bankruptcy, either you should have very low income, or the loan should have been from a for-profit trade school.
The Brunner Test
According to this test, your student loan can be discharged if you are:
- poor enough to maintain a minimum standard of living for you and your dependents if you are made to repay the loan;
- your financial situation is not likely to improve for a significant period (repayment);
- you have previously made a good faith effort to repay the student loan.
The court considers all factors before determining if repaying the student loan constitutes an undue hardship in your case. Other tests, apart from Brunner Test food include a special test, Health Education Assistance Loans (HEAL). In this case, you need to show that the repayment of the loan which was due more than seven years ago will result in an immense burden on your life. For more details on which tests are used to get student loan discharged, call 888-297-6023 to speak with expert bankruptcy lawyers.
What is the procedure to get student loan discharged?
Hiring an expert attorney is the primary step to get loans discharged during bankruptcy. for getting your student loan discharged, you need to file an adversary proceeding to find out if the loan can be discharged. You need to present evidence of undue hardship to get the loan discharged. You also need to show you made efforts previously to repay your student loan. Additionally, if you attended vocational school and you were deceived due to a breach of contract, fraud or unfair practices, then you won’t owe any debt.
In most cases of student loan, the federal government is the lender. However, these days, loans are available through private institutions like banks also. To get your student loan debt discharged (whether government or private), you need to show that repayment will cause undue hardship. Apart from the Brunner test, other standardized tests are also used in Chapter 7 and Chapter 13 cases of a bankruptcy involving the discharge of student loan debt. It is therefore advisable to hire a local bankruptcy attorney who is well-versed with the court rulings in similar cases.
In case your student loan is not discharged, the result varies in Chapter 7 and Chapter 13 bankruptcy Dallas. In the former case, if you are unable to prove undue hardship, the loan survives your bankruptcy and you still owe the money after your bankruptcy discharge. In the case of Chapter 13, if your student loan debt is not discharged, other options are available like paying a reduced amount during the Chapter repayment plan. You will, however, need to pay the entire amount which remains on the loan after your repayment plan ends.