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How Can I Discharge My Student Loans Through Bankruptcy?

Student loan debt is turning into a national embarrassment, and is primed to become a national crisis. One of the problems with student loan debt is that while the costs of getting an education have skyrocketed, the protections for lenders – not the student debtors – have strengthened, all while the job market has fizzled.

The truth is that discharging student loan debts through bankruptcy is extremely difficult to do. The standard set in the law is that the loan cannot be discharged unless it would “impose an undue hardship on the debtor and the debtor’s dependents.” But Congress never defined the term “undue hardship,” so bankruptcy courts have evolved a three part test to establish “undue hardship.” You may be able to discharge your student loan debt if:

  1. You would be unable to maintain even a minimal standard of living if you had to repay the loan, based on your current income and expenses.
  2. Your profoundly diminished standard of living will persist over the life of the loan payment if you are forced to pay the loan.
  3. You have availed yourself of the various administrative tools to help repay the loan, and made a good faith effort to repay the loan.

These are extremely challenging circumstances to demonstrate, though it can be done in some situations. The attorneys at Zelenitz, Shapiro & D’Agostino have years of experience helping people regain financial freedom. Call us today at 718-599-1111.