Student Loan Debt in Bankruptcy:
Is Student Loan Debt Dischargeable in Bankruptcy? The answer is: It depends.
There are 3 factors or prongs (Brunner Test) that must be met to discharge student loan in a bankruptcy:
- Poverty:
- Persistence
- Good Faith
Student Loan Debt in Bankruptcy – Case Example
Details of Pro Se Debtor’s Case:
- Debtor sought to discharge her student loan in bankruptcy.
- Debtor met two of the above prongs.
- Debtor had not responded to the U.S. Department of Education
- Required support behind her application for an administrative discharge was missing
- Debtor’s actions are lack of good faith.
Court Ruling:
- The Debtor could meet all 3 (three) prongs of the requirements to discharge student debt
- However, she did not show good faith when she failed to fully respond to the U.S. Department of Education’s application for an administrative discharge.
- U.S. Department of Education filed a summary judgment application and it was granted by the Court.
- Debtor could not discharge student debt in bankruptcy.
- She fails to show good faith in responding the information requested.
- If the Debtor completed the application and provided the required documents, her student debt was allowed to be discharged.
- Debtor’s lack of legal knowledge and representation adversely affected the Debtor.
In summary, we confirm that representing yourself in a bankruptcy issue is not prudent. Most times, Pro Se Debtors are not knowledgeable in the complex field of bankruptcy law.
A board certified bankruptcy attorney (as I am) would know the requirements and most definitely urged the Debtor to complete the application in full.
If you are looking to reduce or eliminate your debts, contact me for a free bankruptcy consultation:
Ralph A. Ferro, Jr., Esq. (201) 446-5904
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