Discharging student debt based on undue hardship in Florida

While traditionally a non-dischargeable debt, people in Florida may receive a discharge of their education loans if they can prove undue hardship.

Upon graduating from college, approximately 70 percent of U.S. students are carrying some amount of student debt, according to a CNBC report. Unfortunately, after completing their educations, some people in Florida and across the country find themselves falling behind on their student loans. Traditionally, those in such situations do not consider filing for bankruptcy because education debts may not qualify for a discharge. There are circumstances, however, in which they may be eligible to receive such relief.

Repayment poses financial hardships

For the purposes of most chapter 7 bankruptcy cases, student loans are considered non-dischargeable debts. Consequently, people may still be liable for these balances, even after completing a bankruptcy declaration. However, the U.S. Bankruptcy Code provides that exceptions may be in situations when not discharging such debts would impose an undue hardship on the filers or their dependents.

Federal law does not establish a standard definition for undue hardship, nor is one specified by the U.S. Department of Education. Rather, the decision of how this provision should be applied is left to the discretion of the courts. When making this determination, courts often employ the Brunner test. In addition to determining whether the standard of financial hardship is met, the Department of Education requires student loan servicers to consider the amount to be discharged before relieving people of their education debts.

The Brunner test

Established based on a prior court ruling, the Brunner test is a standard by which many courts assess whether student loans present a level of hopelessness for filers. In order to meet the Brunner test, there are three factors that must be proven. People seeking to have their student debts discharged based on undue hardship must show that the hardship will be an ongoing issue over a significant portion of their repayment periods. They must also show that they have made an effort in good faith to fulfill their obligations and that, while repaying these loans, it would not be possible for them to maintain a minimal standard of living.

Obtaining legal counsel

Seeking relief from student debts may be a complicated and murky process for people in Florida and elsewhere. Therefore, those who are struggling to pay back their education loans may find it helpful to consult with a lawyer. An attorney may help them gather the necessary documentation to support their claims, as well as guide them through filing their petitions and any associated hearings and litigation.