Student Loans, Bankruptcy And The Brunner TestMany students who have recently graduated from the nation’s colleges and universities are finding themselves deluged with a massive amount of student loan debt they simply can’t afford to pay with all of their other financial responsibilities.  Fortunately, bankruptcy may help them relieve the financial burden student loans cause by making it easier to discharge their other debts or in some cases by directly discharging the student loan debts .  In order for a debtor to receive a bankruptcy discharge of their student loans they need prove that paying the student loans will create an undue hardship.  In order to prove that an undue hardship exists, the bankruptcy debtor must pass what is called the Brunner test.

There are three parts of the Brunner test:

  1. If the debtor is forced to repay their student loans, they will be unable to maintain a minimal standard of living, based on current income and expenses. In other words, the debtor won’t be able to pay their rent/mortgage or put food on the table for their family if they are forced to repay their student loans.  Someone who might qualify under this part of the test could be a very low-income individual with a large amount of student loans.
  2. Based on the circumstances of the debtor, it is likely that the inability to pay their student loans will persist for a significant portion of the repayment period of the student loans.  Someone with a serious disability might qualify under this part of the test; but there have been cases where those with disabilities have been denied a discharge of the student loans while someone who was in prison was granted a student loan bankruptcy discharge.
  3. The debtor has made a good faith effort to repay their student loans. You probably would not qualify under this part of the test if you have been in default on your student loans for the vast majority of the repayment period.

In order to qualify for a bankruptcy discharge of your student loans, you will need to pass all three parts of the Brunner test.