Undue hardship and the battle against debt

Bankruptcy can potentially solve a lot of financial problems in your life. Strangely enough, student loans are not something that go away when you file and are accepted. They remain. There is an exception, however, to this rule. It’s called Undue Hardship. While this is still not something that courts are overly fond of doing, it is possible assuming you meet the court’s criteria, which can vary from one to the other. Most use what’s called a Brunner Test.

What’s that?

The Brunner Test is a way many courts determine whether an undue hardship exists. There isn’t a set definition for undue hardship in the U.S Bankruptcy Code, so not all courts use this test. But, here it is.

Poverty: Maintaining payments would cause you to fall into poverty. This is based on your expenses and how much money you bring in. If you’ve tried but can’t raise your income, this will help meet this criterion.

Financial Stagnation: This occurs if it looks like your impoverished financial situation is going to maintain for the duration of the loan period. Nerd Wallet states “you may be able to successfully meet this if you have a serious mental or physical disability, received a poor-quality education or have maximized your income potential in your field.”

Good Faith Payments: If you can show a record of payments made towards your loan while keeping in contact with your lender, this could help go a long way to ensuring your debt gets wiped out.

As stated before, this test is not universal, so don’t expect it to be the rubric for deciding your case. Also, this is in no way a suggestion to purposely make yourself look poor just so your loans get removed. There are three possible outcomes for presenting this. One, your loans get discharged. Two, part of your loans gets discharged. Three, none of your loans get discharged.


This is by no means a slam dunk. If you genuinely think you qualify, get your documentation together. This might just get you out of several thousand dollars of debt.

Derek San Filippo

Derek San Filippo

Derek is a freelance writer who spends his off time either working with his rescue animals or writing children’s books. He lives in San Diego with his beautiful wife ... Web: www.financialfeed.com Details