Phone Call Us 414-326-9231
Toll Free 866-678-9352
Text Us 414-277-7742

Student loan debt and the undue hardship requirement, P.2

In our last post, we looked briefly at the undue hardship test used in bankruptcy courts to determine whether debtor is able to have his or her student loans discharged. As we pointed out, a debtor must be able to show three things: (1) inability to maintain a minimal standard of living (2) for a substantial portion of the loan repayment period, (3) despite good faith efforts to repay the loan.

When courts undertake an undue hardship analysis, they consider a number of factors to determine whether the three-part test is satisfied. These factors include: mental or physical impairments; whether there are factors beyond the control of the debtor which affect repayment; whether a debtor pursued alternative repayment plans; whether payments were made on loan debt when resources were available to do so; what other debts the debtor is carrying and the length of time the student loan debt has been owed; the proximity of the debtor's retirement; material changes in the debtor's health; and the debtor's spending habits. 

Another factor that is taken into consideration is whether a Chapter 7 debtor has reaffirmed other debts that would otherwise have been dischargeable in bankruptcy. To reaffirm a debt in bankruptcy is to waive discharge of a debt that could have been discharged. Doing so might be desirable in order to keep an asset that would otherwise have to be liquidated in order to pay the creditor back, but it will also be considered by the court in determining the appropriateness of discharging student loan debt.

We'll continue this discussion in our next post.

No Comments

Leave a comment
Comment Information

Contact Our Milwaukee Law Firm

Reach Miller & Miller Law, LLC, online or call us at 414-326-9231 to schedule a free initial consultation. Our law office also provides Spanish language services. Se habla español.

To schedule an initial consultation, call 414-326-9231 or contact Miller & Miller today.

Free Case Evaluation

* indicates required field

Milwaukee Office
633 W Wisconsin Ave, Suite 500
Milwaukee, WI 53203

Phone: 414-312-6581
Fax: 414-277-1303
Milwaukee Law Office Map

Kenosha Office
6123 Green Bay Road
Suite 210
Kenosha, WI 53142

Phone: 262-326-1669
Kenosha Law Office Map

Brookfield Office
200 S. Executive Drive
Suite 101
Brookfield, WI 53005

Phone: 262-261-0665
Brookfield Law Office Map

Madison Office
2810 Crossroads Drive
Suite 4001
Madison, WI 53718

Phone: 608-260-7133
Madison Law Office Map

Glendale Office
6001 N. Green Bay Avenue
Glendale, WI 53209

Phone: 414-973-8662
Glendale Law Office Map

Appleton Office
4321 W. College Ave.
Suite 200
Appleton, WI 54914

Phone: 920-280-3838
Map & Directions