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Debts and discharge

Undue hardship

The standard a debtor must meet to discharge student loans. Repaying must impose an undue hardship on the debtor and the debtor's dependents, and it must be proven in an adversary proceeding. 1

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How it works

Student loans are generally not discharged in bankruptcy unless not discharging them would impose an undue hardship on the debtor and the debtor's dependents. 1

Under the Justice Department's guidance, its attorneys look at three things: whether the debtor can pay now, whether that inability is likely to continue, and whether the debtor has made good-faith efforts to repay. 2

Common questions

Does missing payments in the past rule me out?

Under that guidance, past non-payment, or not enrolling in an income-driven repayment plan, does not automatically disqualify a debtor. 2

Sources

  1. 11 U.S. Code § 523(a)(8)
  2. DOJ: Student Loan Discharge Guidance: Fact Sheet

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