July 1, 2015 By:
Unfortunately, it’s very difficult to write off a student loan in either a Chapter 7 or Chapter 13 bankruptcy case. Why? Because you have to prove “undue hardship.”
Bankruptcy law excludes student loans from discharge (legal write-off) “unless excepting such debt from discharge. . . would impose an undue hardship on the debtor and the debtor’s dependents. . . .” So all you’ve got to do is show the bankruptcy court that requiring you to pay the student debt would cause you or your family an “undue hardship.”
But that term is not defined anywhere in the Bankruptcy Code. So bankruptcy and appeals courts have spent many years trying to give it practical meaning.
Think about this phrase, “undue hardship.” The dictionary meaning of “undue” is “excessive, going beyond the limits of what is normal.” So the phrase seems to mean that a student loan can’t be written off even paying it causes you a hardship. It has to cause you excessive hardship.
But what does that mean in the real world for people who can’t make their student loan payments?
As courts all over the country have struggled to figure out when an “undue hardship” exists, they have come to a general consensus. To fulfill this “undue hardship” standard, you need to meet three conditions:
It’s not easy to discharge student loans in bankruptcy, but for an increasing number of people their financial challenges include a major amount of student loans. If you are one of those and are considering bankruptcy, it’s crucial you get good legal advice. Student loans take many, many years to pay off, so how you dealing with them will have a big effect on your life. If you are in the Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, Royse City, Sachse or Rowlett, Texas, contact the Law Office of Carrie Weir. The initial consultation is free. Please call 972-772-3083 or use this form .