The Brunner Test Student Loans: How To Prove Undue Hardship

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So you read about the former lawyer who eliminated $200 thousand in student loan debt in his bankruptcy case. The bankruptcy judge in his case said that he passed the Brunner Test and was able to prove he had undue hardship.

Wall Street Journal headline of man discharging student loan debt in bankruptcy.

Now you're wondering two things:

  1. What is the Brunner Test for student loans? and
  2. Whether you can pass the Brunner test to discharge your student loans in bankruptcy?

Let's answer those questions.

What is the Brunner Test

The Brunner test is a test that many bankruptcy judges use to decide if you can discharge student loans in bankruptcy. The test asks three questions:

  1. Based on your current income, can you maintain a minimal standard of living for you and your dependents while repaying your student loan debt?
  2. Is your financial situation likely to stay the same for a significant portion of the repayment period of the student loans?
  3. Have you made a good faith effort to repay your student loans?

You lose if a judge decides:

  • you can maintain a minimal standard of living while repaying your student loans;
  • your financial situation will improve during the repayment period; or
  • if you failed to make a good faith effort to repay your student loans (ask for a deferment, or forbearance, apply for loan consolidation, make your monthly payments, etc.).

Basically, if you fail any one of the questions, you'll fail the Brunner Test.

History of the Brunner Test

The Brunner Test comes from a late 80's bankruptcy case, Brunner v New York State Higher Education Services, Corp.. In that case, the student loan borrower was trying to discharge a federal student loan due to hardship.

The Bankruptcy Code doesn't define undue hardship.

As a result, courts defined it for themselves. The Brunner Test was an attempt by one court to try and define student loan undue hardship.

Here's my analysis of the Brunner cases.

How to pass the Brunner Test

Whether you file a chapter 7 bankruptcy or a chapter 13 bankruptcy, let me make one thing clear:

There's no one, single way to pass the Brunner test and meet the undue hardship standard.

A debtor could present the exact same student loan adversary complaint to two different judges and get two different outcomes.

One judge will apply the test and conclude that your student loans are dischargeable as an undue hardship. Another will look at those same facts and reach the opposite conclusion.

Why?

The Brunner test is subjective.

Your ability to meet the undue hardship standard often depends on which bankruptcy judge decides your case.

Because of that, the best way to learn how to pass the Brunner test is to read old bankruptcy cases written by the judge you'll file your case in front of.

You can do that using Google Scholar.

Google Scholar homepage showing search term for Brunner Test student loan cases.

I go through the student loan adversary proceeding cases for each bankruptcy court to figure out why they granted student loan discharges.

Admittedly, this is tedious work. It's a lot of reading and a lot of note-taking.

But when you do it, you get a feel for what facts matter to getting a hardship discharge.

Facts to Pass Brunner Test

Here's a shortlist of relevant facts I found that matter when analyzing if you can prove undue hardship using the Brunner Test:

  • Are the loans federal student loans or private student loans? Federal loans are harder to discharge than a private student loan because they offer income-driven repayment plans.
  • Are you eligible for an income-driven repayment plan? $0-low monthly payments make passing the test hard.
  • How much student debt do you owe? The more student loan debt you have the better.
  • What's your current monthly income? The lower your monthly income the better.
  • Do you work full-time or part-time? Full-time work is better. Full-time work plus part-time work is awesome.
  • Are you married? Your partner's income will effect your ability to discharge your student loans.
  • Do you have children? If you're 50 years of younger with small kids, that's a positive factor.
  • Are you or your dependents disabled? Disabilities that negatively affect your ability to work increase your chances of getting a discharge.
  • How many student loan payments have you made? The more payments you've made, the more good faith you've shown.
  • Have you used deferments/forbearances? Using deferments and forbearances shows a good faith effort to repay your debts.
  • Are you upside down with your mortgage? The less equity you have to borrow against to pay your loans, the better.
  • Do you have savings/retirement funds? The less money you've put towards retirement, the better.

Lastly, are there any other additional circumstances that make it incredibly difficult for you to pay back your student loans? If so, how long will that state of affairs last?

Bottom Line

Although news headlines make it seem as if student loan borrowers have a better chance of getting a bankruptcy discharge of their student loans, that's not reality.

Bankruptcy law hasn't changed for proving undue hardship.

In most courts across the United States, it's still incredibly difficult to eliminate student loans in bankruptcy due to hardship.

Still, despite the odds, when you feel as if there's no way out of your student loan debt, it makes total sense to sit down with a student loan bankruptcy attorney to discuss options and likelihood of success.

Let's talk if you'd like me to do that for you.

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I'm a student loan lawyer that helps people like you with their federal and private student loans wherever they live.

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