Can I get bankruptcy relief from my student loans?

It is possible to get bankruptcy relief when you file a bankruptcy. The standard is very difficult to meet though. Unfortunately, there's an older 1987 case from someone who tried to discharge student loan debt only a few months after they graduated and the court came down very harshly on that person, on that debtor and established this three-pronged test that we now have to follow. Basically, we have to show that the debtor has tried to repay the student loans in good faith. We also have to show that they, throughout the majority of the repayment period, can't afford a minimal standard of living plus repay their student loans. We also have to show that they've maximized income and minimized expenses.

To be able to show that you can't repay your student loans for the next 25 years is not an easy standard because it's so speculative. We don't know what someone might do. The more successful cases in discharging student loans in a bankruptcy involves someone later in life who's tried to obtain a better job for a number of years, maybe someone with health problems, maybe someone nearing retirement. It's not an easy test to be made and it certainly is almost impossible for someone who is a new graduate.