Student loans and bankruptcy. Certain student loans could be discharged in bankruptcy. A recent court ruling could change the way certain student loans are treated in a bankruptcy. Student loans have always been difficult to discharge in bankruptcy.  Student loans are dischargeable in a bankruptcy if the Debtor can show “undue hardship”, but that standard is not easy to meet. Most courts use the standard laid out in the 1987 case, Brunner v. Ney York State Higher Education Services, that case states a debtor must prove the inability to maintain a minimal standard of living for the debtor and the debtor’s dependents if forced to repay the loans, that additional circumstances exist that tend to indicate that this condition is likely to persist for a significant portion of the like of the loan, and that debtor has made a good faith effort to repay the loan, the debtor must prove all 3 parts of this test in order to receive a discharge of the student loan. Very few Debtors are able to pass this test. Recently, the Eight Circuit Court of Appeals issued a decision that could make more debtors eligible for discharge with regards to student loans. the decision was made in the case of Conway v. National Collegiate Trust. The Court, instead of using the test in Brunner, used a “totality of the circumstances” test, using the debtor’s past, present, and future financial resources to determine the hardship.  The lower bankruptcy court in Conway must evaluate each loan in question to decide which loan can be reasonably be repaid. While, this decision is only binding on the Eight Circuit, many in the bankruptcy world are hopeful this new easier standard for those in bankruptcy may soon be applied in other districts. If you are thinking about filing for bankruptcy, contact a knowledgeable bankruptcy attorney to answer your questions and help you decide if bankruptcy is right for you. At the Butler Law Firm, P.A., initial consultations are free, so let an experienced bankruptcy lawyer assist you to help solve your financial problems today. You will receive experienced counsel throughout your bankruptcy case by a bankruptcy lawyer dedicated to help you obtain a fresh start.

The Butler Law Firm PA serves all individuals living in South Florida and residing in Broward County, Palm Beach County, and Miami-Dade County; moreover we have worked for, counseled, or filed bankruptcy for individuals living in the cities of: Aventura, Boca Raton, Boynton Beach, Coconut Creek, Coral Gables, Coral Springs, Cutler Bay, Dania Beach, Davie, Deerfield Beach, Delray Beach, Doral, Fort Lauderdale, Ft Lauderdale, Greenacres, Hallandale, Hialeah, Hollywood, Jupiter, Lantana, Lauderdale Lakes, Lauderhill, Miami, Miami Beach, Miami Gardens, Miami Lakes, Miramar, North Miami, North Miami Beach, Palm Beach Gardens, Palm Springs, Palmetto Bay, Pembroke Pines, Pinecrest, Plantation, Riviera Beach, Royal Palm Beach, Sunny Isles Beach, Sunrise, and West Palm Beach.

Leave a Reply

Your email address will not be published.

Imagine Life Without Debt!

The next chapter of your life is waiting for you. Get started by talking to the Butler Law Firm today.

(954) 797-5338Call For FREE Introductory Meeting

The Butler Law Firm PA

8201 Peters Rd #1000
Plantation, FL 33324
(954) 797-5338Get Directions
1 East Broward Boulevard 7th Floor
Fort Lauderdale, FL 33301