Filing for bankruptcy will stop the garnishment of your wages for student loans, but the chapter 7 or chapter 13 bankruptcy will not absolve you of the debt unless you can prove that your student loan debt is an undue hardship. To establish an undue hardship you will have to prove 3 elements established in Brunner v. NY HESC. Those elements are:
"(1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans."
In light of the difficulty of satisfying this test, few student loan debtors have been successful in discharging their student loans in bankruptcy. In particular, the requirement that your circumstances are likely to persist for a significant portion of the repayment period has proved to be a high hurdle to clear, as repayment obligations can exceed 20 years.
You can learn more about student loans in bankruptcy
Chapter 13 bankruptcy can provide some minor relief if your wages are being garnished for student loan debt. In chapter 13 bankruptcy your wages will not be garnished during your 3 to 5 year chapter 13 plan, but you will likely be unable to satisfy the entire balance within the time period so your debt will continue after your bankruptcy has been concluded.
If you recognize that this country is facing a student loan crisis, write to your elected officials and demand debt relief; demand an easier path to discharging student loans in bankruptcy.
"(1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans."
In light of the difficulty of satisfying this test, few student loan debtors have been successful in discharging their student loans in bankruptcy. In particular, the requirement that your circumstances are likely to persist for a significant portion of the repayment period has proved to be a high hurdle to clear, as repayment obligations can exceed 20 years.
You can learn more about student loans in bankruptcy
Chapter 13 bankruptcy can provide some minor relief if your wages are being garnished for student loan debt. In chapter 13 bankruptcy your wages will not be garnished during your 3 to 5 year chapter 13 plan, but you will likely be unable to satisfy the entire balance within the time period so your debt will continue after your bankruptcy has been concluded.
If you recognize that this country is facing a student loan crisis, write to your elected officials and demand debt relief; demand an easier path to discharging student loans in bankruptcy.
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