Not everyone will pass the Brunner Test

Bankruptcy may be an ideal way for debtors to eliminate most of their outstanding debt balances. However, it is rare to see student loan debts discharged through bankruptcy. For a judge to consider discharging student loans in a bankruptcy case, an individual would need to pass the Brunner Test. To pass this test, an individual needs to show that he or she put forth a good faith effort to repay what he or she owed.

Debtors will also need to show that paying back their student loan balances would create unreasonable hardship. Finally, it needs to be shown that the hardship is unlikely to end before the loan repayment period ends. It is important to know that there is no clear definition of hardship. Therefore, it is up to a judge to determine on a case-by-case basis whether an individual would be able to repay a loan balance now or in the future.

In many cases, judges side with the student loan companies, which means that the debt balances are likely to remain. Instead of pursuing bankruptcy, those who owe money to student loan companies are encouraged to look into income-based repayment plans. They may also want to consider asking to defer payments to a later date. Individuals who file for Chapter 7 bankruptcy should know that it will stay on their credit report for up to 10 years.

Chapter 7 bankruptcy may allow a person to obtain total or partial debt relief. Even if a debt isn't dismissed, filing for bankruptcy may allow a debtor time to work out a new payment plan. It may also cause creditor letters or phone calls to temporarily cease. A legal professional may provide greater insight into the potential benefits of bankruptcy.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Tell Us About Your Case

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Keep In Touch

East Orange Office
7 Glenwood Avenue,
Suite 311B
East Orange, NJ 07017

Phone: 973-414-8069
Fax: 973-675-5886
Map & Directions

Newark Office
168 Bloomfield Avenue
Newark, NJ 07104

Phone: 973-419-5266
Map & Directions

Paterson Office
100 Hamilton Plaza,
Suite 405
Paterson, NJ 07510

Phone: 973-419-7631
Map & Directions

Jersey City Office
26 Journal Square,
Suite 603
Jersey City, NJ 07306

Phone: 201-205-2496
Map & Directions