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How to Have Student Loans Discharged in Chapter 7 Bankruptcy


Are you struggling with student loans and wondering about your options for relief from that debt? It is a particularly good time to talk with an Orange County bankruptcy lawyer about how you might be able to have your student loans discharged in a Chapter 7 bankruptcy case in California. While you might have heard the commonly shared myth that student loans are impossible to eliminate in a bankruptcy case, we want to emphasize that it can indeed be possible to have your student loans discharged when you file for Chapter 7 bankruptcy. Debtors have long had the option to seek a discharge of student loans in a liquidation bankruptcy, and the process has recently become significantly easier.

Understand the Undue Hardship Requirement 

In order to have your student loans discharged in a Chapter 7 case, you will need to understand the “undue hardship” requirement. In short, the US Bankruptcy Code identifies educational debt as an “exception to discharge” unless a debtor can show that continuing to make student loan payments would impose an undue hardship.

Learn About the New Process for Proving Undue Hardship 

Until relatively recently, meeting the undue hardship requirement could be time-intensive and expensive, but the US Department of Justice announced new guidance that changed the process for debtors. While debtors must still file an adversary proceeding alongside their Chapter 7 case, they do not need to go through a range of steps to provide evidence of undue hardship. Instead, a debtor will fill out an attestation form, which will be reviewed by DOJ attorneys to determine the following of the debtor:

  • Present ability to pay student debt;
  • Future ability to pay student debt; and
  • Good faith effort in the past to pay (or manage) student debt.

The DOJ attorney will then make a recommendation to the bankruptcy judge, which can be a recommendation for full or partial discharge of the debtor’s student loans.

File a Bankruptcy Petition and Adversary Proceeding 

To have your student loans discharged, you will need to file a bankruptcy petition and file the parallel adversary proceeding. Your lawyer will assist you with all aspects of your case.

Fill Out the Attestation Form 

Then, you will fill out the 15-page attestation form, which will provide the DOJ with information about your current financial circumstances, your likely future financial circumstances, and past efforts toward repaying your student loans. Once you go through these steps, you can complete the rest of your bankruptcy case and potentially be eligible to have your student loans discharged.

Contact a Chapter 7 Bankruptcy Lawyer 

Do you have questions about having student loans discharged in a Chapter 7 bankruptcy case, or are you ready to file? You should contact an experienced Chapter 7 bankruptcy attorney at The Law Office of Charles A. May today to discuss the particularities of your case and to find out more about having your loans discharged when you file for bankruptcy. We can give you more information about the likelihood of a discharge based on your financial circumstances, and we will represent you throughout your bankruptcy case.


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