{"id":102989,"date":"2020-11-02T12:06:17","date_gmt":"2020-11-02T09:06:17","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/discharging-student-loans-in-bankruptcy-could-it-soon-get-easier\/"},"modified":"2020-11-02T12:06:17","modified_gmt":"2020-11-02T09:06:17","slug":"discharging-student-loans-in-bankruptcy-could-it-soon-get-easier","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/discharging-student-loans-in-bankruptcy-could-it-soon-get-easier\/","title":{"rendered":"#\n  Discharging student loans in bankruptcy\u2014could it soon get easier?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a37c61314419\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a37c61314419\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/discharging-student-loans-in-bankruptcy-could-it-soon-get-easier\/#Change_is_a-coming_Some_recent_decisions_could_serve_as_a_precedent_for_future_bankruptcy_cases_involving_student_loans\" >Change is a-coming: Some recent decisions could serve as a precedent for future bankruptcy cases involving student loans<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/discharging-student-loans-in-bankruptcy-could-it-soon-get-easier\/#Why_student_loan_discharge_in_bankruptcy_poses_a_challenge\" >Why student loan discharge in bankruptcy poses a challenge<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/discharging-student-loans-in-bankruptcy-could-it-soon-get-easier\/#How_to_strategize_student_loan_discharge_in_bankruptcy\" >How to strategize student loan discharge in bankruptcy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/discharging-student-loans-in-bankruptcy-could-it-soon-get-easier\/#What_to_do_if_youre_denied_a_discharge\" >What to do if you\u2019re denied a discharge<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/discharging-student-loans-in-bankruptcy-could-it-soon-get-easier\/#More_from_NerdWallet\" >More from NerdWallet:<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/discharging-student-loans-in-bankruptcy-could-it-soon-get-easier\/#Anna_Helhoski\" >Anna Helhoski<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Discharging student loans in bankruptcy\u2014could it soon get easier?<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Change_is_a-coming_Some_recent_decisions_could_serve_as_a_precedent_for_future_bankruptcy_cases_involving_student_loans\"><\/span>\n  Change is a-coming: Some recent decisions could serve as a precedent for future bankruptcy cases involving student loans<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"362452C6-1A26-11EB-B6F6-C89F7FF48B59\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p class=\"editorcomment\">This <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/loans\/student-loans\/student-loan-discharge-bankruptcy-getting-easier?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=880905\" class=\"icon none\">article<\/a> is reprinted by permission from <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"http:\/\/nerdwallet.com\/blog\/?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">NerdWallet<\/a>.<\/p>\n<p> Student loan borrowers who seek to have their debt canceled in\u00a0bankruptcy\u00a0\u2014\u00a0what\u2019s known as discharge \u2014 typically find it an expensive process with standards that can be difficult to meet. But recent bankruptcy court rulings and lawmakers\u2019 support of relief for overburdened borrowers may signal a change is coming.<\/p>\n<div class=\"paywall\">\n       In January, a New York court discharged over $200,000 of student loan debt for one borrower. Then, in August, a federal <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>eals court ruling eliminated $200,000 for a Colorado couple who held 11 private student loan accounts. And in\u00a0September, a New York judge ruled to enforce a prior bankruptcy discharge of a borrower\u2019s $400,000 of federal student loans that a servicer had failed to carry out.<\/p>\n<p> These decisions could serve as a precedent for future <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/loans\/student-loans\/student-loans-bankruptcy?utm_campaign=ct_prod&amp;utm_content=880905&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">bankruptcy <\/a>cases involving student loans, says John Rao, an attorney with the National Consumer Law Center.<\/p>\n<p>\u201cA lot of people, even some of the lawyers who represent consumers, thought for years that you really shouldn\u2019t even try because there\u2019s not a chance you\u2019ll win, but I think everyone is looking at it now with sort of a fresh look,\u201d Rao says.<\/p>\n<p>Courts aren\u2019t the only example of potentially easing standards. The House of Representatives recently took up a bill that would expand bankruptcy relief to more student loan borrowers. And the platform of former Vice President Joe Biden, the Democratic presidential candidate, included a bankruptcy reform proposal to end rules that make it \u201cnearly impossible\u201d to discharge private student loan debt.<\/p>\n<p>A possible reason for a shift toward dismissing these loans in bankruptcy is the student loan debt crisis in the U.S.<\/p>\n<p>Overall student loan debt increased 107% in the past decade, according to data analyzed by the Federal Reserve Bank of St. Louis. Higher education experts say the extra hoops borrowers must jump through to get student loan relief with bankruptcy make discharge more expensive and difficult to achieve than canceling other types of consumer debt.<\/p>\n<p><strong>Be sure to read: <\/strong>\u2018Consumer harm\u2019 could happen when government starts collecting student loan payments again, CFPB warns<\/p>\n<p>\u201cTo get to those hoops, you usually need more money to pay, and usually the people who are trying to declare bankruptcy on their loans don\u2019t have that money available to them,\u201d says Douglas Webber, associate professor of economics at Temple University.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<h6><span class=\"ez-toc-section\" id=\"Why_student_loan_discharge_in_bankruptcy_poses_a_challenge\"><\/span>Why student loan discharge in bankruptcy poses a challenge<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Here\u2019s why student loans are so onerous to get rid of in a bankruptcy filing:<\/p>\n<p><strong>It\u2019s cost-prohibitive.<\/strong>\u00a0As Webber says, the whole process is expensive for borrowers who can expect to pay several thousand dollars for filing and attorney\u2019s fees.<\/p>\n<p><strong>Bankruptcy courts are notoriously stringent.<\/strong>\u00a0After filing for bankruptcy, a second action,\u00a0an Adversary Proceeding, must be filed to ask the court to find that the debt would prove an \u201cundue hardship\u201d to repay. Then, borrowers have to prove they meet the standards of \u201cundue hardship,\u201d a concept that\u2019s left to bankruptcy judges to interpret.<\/p>\n<p>The undue hardship standard is especially difficult for federal student loan borrowers to prove due to the safety nets offered to those borrowers, such as payment pauses and repayment plans.<\/p>\n<p>To meet the standard, cases typically must pass the \u201cBrunner test,\u201d named for a student who attempted to discharge her student loans in bankruptcy less than a year after earning her master\u2019s degree (she was denied).<\/p>\n<ul class=\"articleList\">\n<li>\n      To pass the Brunner test, loans must meet these conditions:<\/p>\n<\/li>\n<li>\n      Payments would keep you from maintaining a minimal standard of living.<\/p>\n<\/li>\n<li>\n      You\u2019re unlikely to earn enough money to make payments on your loans in the foreseeable future, usually due to a disability.<\/p>\n<\/li>\n<li>\n      You\u2019ve already made good faith efforts to repay your loans such as making some payments or negotiating a lower payment plan.<\/p>\n<\/li>\n<\/ul>\n<p>The Brunner test is more difficult for federal loan borrowers to meet because of\u00a0<a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/loans\/student-loans\/income-driven-repayment-right?utm_campaign=ct_prod&amp;utm_content=880905&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">income-driven repayment<\/a>, which is available to all federal direct loan holders. This plan helps borrowers keep payments manageable by setting payments at a portion of their income. It could be as low as $0 for those who are unemployed or underemployed (those who earn below 150% of the poverty line).<\/p>\n<h6><span class=\"ez-toc-section\" id=\"How_to_strategize_student_loan_discharge_in_bankruptcy\"><\/span>How to strategize student loan discharge in bankruptcy<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>You won\u2019t know if your student loans are discharged until the end of bankruptcy proceedings so make sure to pay what you can until then.<\/p>\n<p>You must apply for Chapter 7 or Chapter 13 bankruptcy. Contact a student loan lawyer or bankruptcy attorney with student loan experience \u2014 if you can afford to \u2014 to find out the best option for you. Otherwise, there are a few free or inexpensive resources available through Legal Services Corporation or\u00a0<a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"http:\/\/www.studentloanborrowerassistance.org\/resources\/referral-resource\/legal-resources\/\" class=\"icon none\">Student Loan Borrower Assistance<\/a>.<\/p>\n<p><strong>Also see: <\/strong>This man earns $21,000 a year and owes $24,000 in student debt after his college closed. Why wasn\u2019t anyone held accountable?<\/p>\n<p>Once you\u2019ve filed for bankruptcy, you\u2019ll need your attorney to file a written complaint outlining your case through an Adversary Proceeding. The rest is left up to the judge to determine whether you will receive any discharge or not.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"What_to_do_if_youre_denied_a_discharge\"><\/span>What to do if you\u2019re denied a discharge<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Bankruptcy isn\u2019t the only option to unburden yourself of loan debt. You could file an appeal or seek an alternative resolution:<a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/loans\/student-loans\/student-loan-settlement-possible?utm_campaign=ct_prod&amp;utm_content=880905&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">\u00a0settling the debt<\/a>\u00a0for less than you owe. You won\u2019t have the full debt forgiven, but it may be a more achievable option.<\/p>\n<p><strong>Read next: <\/strong>Is grad school worth it?<\/p>\n<p>If bankruptcy or settlement aren\u2019t options for you, enrolling in an income-driven repayment is still the best choice to keep repayment affordable. Private loan borrowers should contact their lender to find out the options available to lower payments.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"More_from_NerdWallet\"><\/span>More from NerdWallet:<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<ul class=\"articleList\">\n<li>\n      <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/loans\/student-loans\/student-loans-bankruptcy?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=880905\" class=\"icon none\">You Can File for Bankruptcy for Student Loans \u2014 Here\u2019s How<\/a><\/p>\n<\/li>\n<li>\n      <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/loans\/student-loans\/student-loan-forgiveness?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=880905\" class=\"icon none\">10+ Student Loan Forgiveness Programs That Discharge Loans<\/a><\/p>\n<\/li>\n<li>\n      <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/loans\/student-loans\/student-loan-settlement-possible?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=880905\" class=\"icon none\">Is a Student Loan Settlement Possible for You?<\/a><\/p>\n<\/li>\n<\/ul>\n<p class=\"editorcomment\">Anna Helhoski is a writer at NerdWallet. Email: anna@nerdwallet.com. <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a>: @AnnaHelhoski.<\/p>\n<div data-layout=\"\n              inline\" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetCommentingPromo\n            \n            inline\n  article__inset\n        article__inset--type-InsetCommentingPromo\n            article__inset--inline\n  \"><\/p><\/div>\n<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Anna Helhoski\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Anna_Helhoski\"><\/span>Anna Helhoski<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener noreferrer\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B362452C6-1A26-11EB-B6F6-C89F7FF48B59%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Discharging student loans in bankruptcy\u2014could it soon get easier? &#8221; Change is a-coming: Some recent decisions could serve as a precedent for future bankruptcy cases involving student loans This article is reprinted by permission from NerdWallet. Student loan borrowers who seek to have their debt canceled in\u00a0bankruptcy\u00a0\u2014\u00a0what\u2019s known as discharge \u2014 typically find it&#8230;<\/p>\n","protected":false},"author":1,"featured_media":102990,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-102989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/102989","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=102989"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/102989\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/102990"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=102989"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=102989"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=102989"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}