Can I erase my student loans by filing bankruptcy?

If you’re struggling with student loan debt, you might be wondering, “Can I erase my student loans by filing bankruptcy?” While discharging student loans in bankruptcy is challenging, it’s not impossible. At The Law Offices of Adam C. Gomerman, we’ve been helping Long Islanders navigate bankruptcy laws since 1991. Let’s break down what you need to know about student loans and bankruptcy.

The Short Answer: It’s Possible, But Difficult

Discharging student loans in bankruptcy is more complicated than discharging other types of debt. Unlike credit card debt or medical bills, student loans require an additional legal step to prove that repaying them would cause undue hardship. However, with the right approach and legal support, it is possible to erase student loan debt in some cases.

The Undue Hardship Standard

To have your student loans discharged in bankruptcy, you must demonstrate that repaying them would cause undue hardship. Courts typically use the Brunner Test to evaluate undue hardship. This test requires you to prove three things:

Inability to Maintain a Minimal Standard of Living:
- You must show that repaying the loans would prevent you from meeting basic living expenses, such as housing, food, and utilities.
Persistent Financial Difficulty:
- Your financial struggles must be ongoing and unlikely to improve. For example, if you have a low income due to permanent disability or a lack of job prospects in your field, you may meet this criterion.
Good Faith Effort to Repay:
- You must show that you’ve made an effort to repay the loans, such as making payments when possible, applying for deferments or forbearances, or exploring alternative repayment plans.

The burden of proof is high, and each case is evaluated individually.

Filing an Adversary Proceeding

To discharge student loans in bankruptcy, you’ll need to file an adversary proceeding, a separate lawsuit within your bankruptcy case. This is where you present evidence to prove undue hardship. The court will review your financial situation, repayment history, and other relevant factors before making a decision.

Factors That Can Improve Your Chances

Certain circumstances may increase the likelihood of discharging student loans in bankruptcy:

Permanent Disability: If a disability prevents you from working, courts may be more likely to discharge the debt.
Low Income: A prolonged inability to earn enough income to cover both living expenses and loan payments strengthens your case.
No Progress Despite Efforts: If you’ve consistently made payments but the balance hasn’t decreased due to high interest rates, it demonstrates a lack of feasibility in repayment.

Alternatives to Bankruptcy for Student Loans

If bankruptcy isn’t an option or you don’t meet the undue hardship standard, consider these alternatives:

Income-Driven Repayment Plans: Federal student loans offer repayment plans based on your income, which may reduce monthly payments.
Loan Forgiveness Programs: Explore forgiveness options for public service, teaching, or other qualifying professions.
Refinancing or Consolidation: Lower interest rates or extended repayment terms through refinancing may make the debt more manageable.
Deferment or Forbearance: Temporarily pause payments if you’re experiencing financial hardship.

Our experienced attorneys can help you explore all your options and decide on the best course of action.

Why Is Discharging Student Loans So Difficult?

Student loans are treated differently under bankruptcy laws to protect the federal funds used to issue or back many of these loans. As a result, Congress implemented stricter rules for discharging student loans to ensure borrowers exhaust all other repayment options first.

Why Choose The Law Offices of Adam C. Gomerman?

At The Law Offices of Adam C. Gomerman, we’ve spent decades helping Long Islanders find financial relief through bankruptcy. Here’s why you can trust us:

Experience: Over 30 years of guiding clients through complex bankruptcy cases.
Personal Attention: We tailor our approach to your specific situation, ensuring you understand your rights and options.
Proven Advocacy: Whether it’s an adversary proceeding or exploring alternative solutions, we fight for your best interests.

Remember, if we can’t help you, nobody can.

Take the First Step Toward Debt Relief

Student loan debt can feel overwhelming, but you’re not alone. Whether bankruptcy is the right solution or there’s another path forward, we’re here to help.

Schedule a free consultation with our experienced bankruptcy attorney in Long Island.

Final Thoughts

Discharging student loans in bankruptcy is challenging but not impossible. If you’re struggling with repayment, understanding your options is the first step toward financial relief. At The Law Offices of Adam C. Gomerman, we’re here to guide you through the process with expertise and compassion.

Don’t let student loan debt control your life. Reach out to us today, and let’s explore the possibilities together for a brighter financial future.