District Court Affirms Student Loan Discharge Order

This case underscores that discharing student loans in bankruptcy is possible, given the right set of facts. In this case, the debtors were parents of a severely disabled child and a huge amount of student loans. Normally, for student loans to be discharged in bankruptcy the debtor must prove that he has reduced his budget to the "bare essentials"; that his poor financial situation is likely to persist; and that he has made a "good faith" effort to repay his debts. If you have substantial student loan debt and believe you can pass the Poverty, Persistence and Good Faith test, you are welcome to give us a call to discuss your situation further.