Unfortunately, unless the court finds that paying off the student loan will impose an undue hardship on you or your dependents, student loans are not dischargeable in any chapter of bankruptcy.The bankruptcy code does not define “undue hardship,” leaving the courts to decide what constitutes an undue hardship.
The burden to demonstrate undue hardship will be on you. Courts vary in opinion, but they often apply a stringent three-part test to determine whether an undue hardship is present:
1. Income: If after you will not be able to maintain a minimum standard of living for yourself and/or your dependents after paying off the student loans. Minimum standard of living is objective, it’s mostly confined to food, clothing, and other basic necessities. It is subjective according to what you are used to prior to filing for bankruptcy. It is very hard to meet this element of the three part test.
2. Duration: If the financial situation that satisfies the income element will continue for a significant long period of time – often decades.
3. Good faith: You must have made a good faith effort to repay the loan prior to filing bankruptcy.
