The Short Answer
Discharging student loans in bankruptcy is possible, but it requires passing the Brunner test — a three-part legal standard that asks whether repayment causes you undue hardship, whether that hardship is likely to persist, and whether you've made a good faith effort to repay. All three factors must be met, and the bar is high. You'll need to file an adversary proceeding, which is a separate lawsuit inside your bankruptcy case, to get a ruling on dischargeability. Whether you succeed depends on your specific income, expenses, and loan history — not just the fact that you're struggling.
The Brunner test is a legal standard used to determine whether student loans can be discharged (eliminated) in bankruptcy. The test was established in the 1987 court case In re Brunner, and it has since been used as a guideline for determining the dischargeability of student loans in bankruptcy cases.
The Brunner test consists of three factors that must be met for a borrower to be eligible for student loan discharge in bankruptcy:
- Hardship: The borrower must demonstrate that repaying the student loans would cause undue hardship. This means that the borrower cannot maintain a minimal standard of living if they are required to pay back their student loans.
- Good faith: The borrower must show that they have made a good faith effort to repay their student loans before seeking discharge in bankruptcy. This typically involves demonstrating that the borrower has made payments on their student loans, even if they were unable to pay the full amount.
- Persistence: The borrower must show that their financial circumstances are unlikely to change in the future. This means that the borrower must demonstrate that their hardship is likely to continue for a significant period of time.
If a borrower meets all three factors of the Brunner test, they may be eligible to discharge their student loans in bankruptcy. However, it’s important to note that the Brunner test is just one factor in determining student loan dischargeability in bankruptcy. Other factors, such as the type of student loans (e.g. private or federal) and the bankruptcy chapter being filed under, can also impact a borrower’s ability to discharge their student loans in bankruptcy.
It’s also worth noting that discharging student loans in bankruptcy is not an easy process. Borrowers must typically file an adversary proceeding, which is a separate lawsuit within the bankruptcy case, to seek a determination of dischargeability for their student loans. This can be a complex and time-consuming process, and it’s important for borrowers to seek the guidance of a bankruptcy attorney to navigate the process.
In summary, the Brunner test is a legal standard used to determine whether student loans can be discharged in bankruptcy. It consists of three factors: hardship, good faith, and persistence. If a borrower meets all three factors, they may be eligible to discharge their student loans in bankruptcy. However, it’s important to note that discharging student loans in bankruptcy is a complex process and requires the guidance of a bankruptcy attorney.
Key Takeaways
- The Brunner test has three prongs — undue hardship, persistence of that hardship, and good faith repayment efforts — and you must satisfy all three to discharge student loans in bankruptcy.
- Discharging student loans is not automatic; it requires filing an adversary proceeding, which is a separate legal action within your bankruptcy case.
- "Good faith" typically means showing a history of payments or enrollment in income-driven repayment plans, not just an inability to pay.
- Both federal and private student loans can potentially be discharged, but the type of loan and the bankruptcy chapter you file under can affect your options.
- The adversary proceeding process is complex and time-consuming, making experienced legal representation critical to building the strongest possible case.
- Most borrowers who qualify have a documented, long-term inability to earn enough income to cover both basic living expenses and loan repayment.
Attorney Insight
The mistake I see most often is borrowers assuming student loans are completely untouchable in bankruptcy and never even asking the question. The Brunner test is genuinely difficult to meet, but I've seen clients with permanent disabilities, chronic illnesses, or decades of below-median income who had real, viable cases — and they walked away from relief they were actually entitled to. The adversary proceeding process intimidates people, and some attorneys won't take it on, but skipping the analysis entirely is a disservice to clients who may qualify. If you've been in repayment for years with no realistic path to payoff, it's worth a hard look before you assume the answer is no.
