Can You Discharge Student Loans in Bankruptcy?
The Answer Is Yes—With the Right Legal Strategy
At The Independence Law Firm, we’ve built our entire practice around a simple truth: student loans CAN be discharged in bankruptcy, despite what you may have heard. The key is working with attorneys who specialize in this complex area of law and understand how to build winning cases.
The Myth vs. The Reality
The Persistent Myth
For decades, people have believed that student loans are impossible to discharge in bankruptcy. This misconception has prevented millions from even exploring their options. Many bankruptcy attorneys perpetuate this myth by refusing to take these cases or telling clients it cannot be done.
The Legal Reality
Federal law does NOT prohibit student loan discharge. Instead, it requires proving “undue hardship”—a standard that, while challenging, is absolutely achievable with the right approach. At The Independence Law Firm, we’ve successfully discharged student loans by understanding exactly how to meet this standard.
Understanding the Undue Hardship Standard
The Brunner Test (Used in Most Circuits)
To discharge student loans, you must prove three elements:
- Poverty: You cannot maintain a minimal standard of living for yourself and dependents if forced to repay the loans
- Persistence: Your financial situation is likely to persist for a significant portion of the repayment period
- Good Faith: You’ve made good faith efforts to repay the loans
The Totality of Circumstances Test (Used in Some Circuits)
This more flexible standard considers all relevant factors:
- Your past, present, and future financial resources
- Your reasonable necessary living expenses
- Any other relevant facts and circumstances
The Independence Law Firm Advantage
We know which test applies in your jurisdiction and exactly how local judges interpret these standards. This expertise dramatically improves your chances of success.
Types of Loans We Can Help Discharge
Federal Student Loans
- Direct Loans
- FFEL Loans
- Perkins Loans
- Parent PLUS Loans
- Grad PLUS Loans
- Consolidation Loans
Private Student Loans
Often easier to discharge than federal loans:
- Bank-issued student loans
- Credit union education loans
- School-issued loans
- State agency loans
- Refinanced student loans
Special Circumstances
- Professional certification loans (bar exam, medical boards)
- Loans for unaccredited schools
- Fraudulent school loans
- Co-signed loans
Who Qualifies for Student Loan Discharge?
Strong Candidates Include:
Medical Hardships
- Chronic illnesses preventing full employment
- Disabilities (physical or mental)
- Conditions requiring expensive ongoing treatment
- Age-related health limitations
Economic Hardships
- Long-term unemployment despite efforts
- Underemployment with no advancement prospects
- Income below poverty guidelines for family size
- Failed careers despite education investment
Personal Circumstances
- Single parents with limited support
- Caregivers for disabled family members
- Older debtors with limited working years
- Victims of predatory schools
Factors That Strengthen Your Case
- Documentation of Attempts to Pay
- History of payments when able
- Attempts at income-driven plans
- Forbearance/deferment history
- Communication with servicers
- Maximized Income Efforts
- Job search documentation
- Additional education/training attempts
- Multiple job holdings
- Gig economy participation
- Minimal Discretionary Spending
- Basic living expenses only
- No luxury purchases
- Necessary expenses well-documented
- Family size considerations
The 2022 Game-Changer
Department of Justice Guidance
In November 2022, the DOJ issued new guidance making discharge easier:
- Clearer standards for government attorneys
- Streamlined processes for certain cases
- Recognition of partial discharge options
- More reasonable interpretation of “undue hardship”
What This Means for You
- Government attorneys may now support your discharge
- Faster settlements possible
- More predictable outcomes
- Increased success rates
Our Proven Process for Discharge
1. Comprehensive Case Evaluation
We analyze:
- Your complete financial picture
- Loan types and amounts
- Hardship documentation
- Jurisdiction-specific factors
2. Strategic Planning
- Determine optimal timing
- Choose the right bankruptcy chapter
- Identify strongest arguments
- Gather compelling evidence
3. Adversary Proceeding Excellence
- Draft powerful complaints
- Present persuasive arguments
- Negotiate from strength
- Trial preparation if needed
4. Maximizing Results
Options we pursue:
- Full discharge of all loans
- Partial discharge of principal
- Interest rate elimination
- Structured settlements
Why Other Attorneys Say It’s Impossible
They Lack Specialized Knowledge
Student loan discharge requires expertise most bankruptcy attorneys don’t have:
- Understanding of education law
- Knowledge of servicer practices
- Familiarity with federal circuits
- Experience with adversary proceedings
It’s Complex and Time-Intensive
Many attorneys prefer simple, quick cases. We’ve built our practice specifically for these complex matters.
They Fear Failure
Without proper experience, success rates are low. Our specialization yields much higher success rates.
The Cost of NOT Trying
Continued Financial Drain
- Decades of payments ahead
- Growing interest accumulation
- Garnished wages and tax refunds
- Seized Social Security benefits
Life Limitations
- Can’t qualify for mortgages
- Career choices limited by garnishment
- Retirement becomes impossible
- Stress affects health and relationships
Your Path to Discharge Starts Here
Don’t let another year pass believing the myth that student loans can’t be discharged. At The Independence Law Firm, we have proven otherwise countless times. Whether you achieve full discharge, partial discharge, or favorable settlement terms, we’ll fight for the best possible outcome.
Take Action Today
Every month you wait is another month of:
- Unnecessary payments
- Accumulating interest
- Lost opportunities
- Continued stress
Contact The Independence Law Firm for a honest assessment of your discharge options. We’ll tell you straight: your chances, the process, the timeline, and the costs.
The first step toward freedom from student loans is recognizing that discharge IS possible—with the right legal team on your side.
