Debt can lead to bankruptcy, and our collective student loan debt is the second biggest form of U.S. household debt. As a country, we currently have over $1.6 trillion in student loans that effects 43 million borrowers. This is triple the amount owed just 13 years ago, and this debt shows no sign of abating any time soon. It even dwarfs the size of credit card and auto loan debt. In fact, the only debt that is larger in the U.S. is mortgage debt. This is why student loan debt discharge-ability has become such a hot button topic recently.

By the numbers

With these numbers in mind, it is no wonder that over 60% of graduates in 2019 graduated with student debt. According to an Institute for College Access & Success analysis, their average debt was nearly $30,000, but this number does not include what their parent’s borrowed. This could easily mean that average debt for the vast majority of new graduates could exceed $50,000 or more.

Bankruptcy discharge-ability

While it is often understood that debt is dischargeable, it is extremely hard, which is why only a few hundred people a year try, and why even a smaller percentage of those are successful. This is because politicians, for years, have made discharging student loan debt harder and harder, and there are different standards for discharging debt depending on where one files. In other words, where one lives can dictate whether student loan debt is dischargeable.

Morality test?

Unlike any other form of debt, student loan debt is subject to what some have called a morality test within adversarial proceedings. In these morality tests, debtors have to expose their entire financial life to the courts and the student loan debt holders. This means every penny must be accounted for, including lunch. For example, even a Starbucks habit, or purchasing lunch every day could be the difference between a student loan discharge or not. Yes, somehow, the fact that you can afford a few dollars a day somehow can equate to meaning that one can afford thousands of dollars in student loan payments.


East Orange, New Jersey, residents do not have to undertake this process alone. Call an attorney immediately when looking for a fresh financial start. While not always easy, with the help of an attorney, the process can at least, be manageable.