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Student Loan Bankruptcy

It Is Possible to Discharge Student Loans in Bankruptcy

The overarching myth that student loans are untouchable when it comes to bankruptcy is flat wrong. While it is not necessarily easy, it is possible to discharge (eliminate) student loans in bankruptcy.

Our team of experienced bankruptcy attorneys at The Turnaround Team understands the intricacies involved in pursuing bankruptcy for holders of student loan debt. Let us put our more than 50 years of experience to work in bringing you the debt relief you require.

Showing Undue Hardship

Brian Blum - Chapter 7 Bankruptcy Attorney“I do not sugarcoat the facts. Clients appreciate that they can rely on me for straightforward information, even when the truth is hard to hear.”
Brian M. Blum, Managing Attorney

The Ninth Circuit—the judicial circuit in which Arizona is a member—follows the Brunner Test when considering whether to discharge student loans in bankruptcy. The Brunner Test requires a showing of undue hardship by the debtor. Such a showing can be met by proving the following three items:

  • The debtor would be unable to maintain minimal standards of living if they had to repay their loans
  • The debtor’s current financial circumstances are likely to last for a significant portion of the loan repayment period
  • The debtor made good faith efforts to repay their loans
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The Department of Education helped make its stance clear on student debt discharges in bankruptcy in a letter it published in July 2015. Examples of circumstances under which it would allow debtors to discharge student loans include when a debtor:

  • Suffers hardship due to a physical or mental impairment
  • Divorces and is unlikely to reestablish the previously set family income
  • Pursues an income-based repayment plan through its loan servicer
  • Has made payments on the loans when they were able
  • Is approaching retirement

You Will Face Litigation if You Want to Discharge Your Student Loans

To eliminate student loans in bankruptcy, you or your attorney needs to start an adversarial proceeding in the bankruptcy court. This is just like a regular trial, except for the fact that it is held in bankruptcy court before a single judge instead of a jury. While you could go it alone in this proceeding, you shouldn’t. Instead, you should work with an experienced litigator and bankruptcy lawyer who can help you make the most effective arguments.

Defaulting on Your Student Loans

If at all possible, do not default on your loans. Defaulting can lead to unbearable financial situations, including wage and tax garnishment. Additionally, you could land in contentious situations with debt collectors, only adding to your overall stress and money problems.

We are here to help you. We can provide you with the guidance you need to stay in the good graces of the loan companies while creating a plan that helps you lower or eliminate your student loan payments.

Let’s Turn Around Your Troublesome Student Debt

If you are suffering under the weight of your education debts, let’s turn it around. Call us at (480) 420-1999 or contact our law firm online to schedule a free consultation to discuss your student loans. Our bankruptcy attorneys will help you understand your options and provide you with a plan to lead you down the path to financial health.


Let’s Talk About Your Bankruptcy Needs

We’d like to help you get started on the right path.. Just call us, or send us an email to tell us about your situation, and let's turn it around!

Call The Turnaround Team at

(480) 420-1999


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