Ninth Circuit Undue Hardship: Proving Your Income, Employment, and Job Search

You don’t need a job to discharge student loans in a Ninth Circuit bankruptcy court. Your work history is still evidence on every part of the undue hardship test, and borrowers who lose these cases usually lose on proof of what work they could get and what they did to find it.

• Three different questions. Courts look at current income, future earning capacity, and job-search effort separately.

• The governing cases. Pena, Nys, Rifino, Mason, Birrane, Hedlund, and Roth set the rules in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam, and the Northern Mariana Islands.

• Federal loans run through DOJ, too. The attestation form asks about employment directly, and it allows “I am not currently employed” as an answer.

• Dated records carry the case. Ninth Circuit losses turned on specific, unanswered gaps in the record, not on application counts.

Your job history enters all three parts of the Brunner test: current income under the first, future earning capacity under the second, and job-search effort under the third. The Ninth Circuit adopted the test in In re Pena, 155 F.3d 1108 (9th Cir. 1998). To discharge a student loan under 11 U.S.C. § 523(a)(8), you must prove that you can’t maintain a minimal standard of living while repaying, that this condition is likely to persist for a significant part of the repayment period, and that you made good-faith efforts to repay. You carry the burden on all three.

The table below shows how each part of the Brunner test treats your work, and which Ninth Circuit cases control each one.

The legal standard itself is covered in how to prove undue hardship, the lawsuit that carries it in filing an adversary proceeding, and the wider question in whether you can file bankruptcy on student loans.

Ninth Circuit courts judge current income by today’s numbers only, future earning capacity against a presumption that your income will rise, and job-search effort by the specific opportunities you did or didn’t pursue.

Your current income: the first prong looks at today

The first Brunner prong compares your current income to your current, reasonable expenses. It does not ask whether you could be earning more. In In re Mason, 464 F.3d 878, 882 n.3 (9th Cir. 2006), the creditor argued that the borrower should have maximized his income under the first prong. The Ninth Circuit treated that argument as waived and, in the alternative, said the first prong turns on current income and expenses.

A nonprecedential 2015 Bankruptcy Appellate Panel decision, In re Ng-A-Qui (9th Cir. BAP No. WW-14-1551), applied the same correction. Questions about whether you should be earning more belong to the second and third prongs, not the first.

Household income still counts under the first prong: if a spouse or partner works, the court and DOJ look at that income alongside yours.

Your future earning capacity: the second prong looks ahead

The second prong asks whether your inability to pay is likely to last. In In re Nys, 446 F.3d 938, 945–47 (9th Cir. 2006), the court held that you don’t carry a separate burden to prove “additional circumstances” beyond your inability to pay, now or in the future. It listed 12 nonexclusive factors that can show a lasting inability to pay. Among them:

• Disability. A serious mental or physical disability, yours or a dependent’s, that prevents employment or advancement.

• Dependent care. Obligations to care for dependents.

• Education quality. A poor-quality education.

• Skills. A lack of usable or marketable job skills.

• Remaining work years. Limited years left in your working life.

• Rising expenses. Expenses likely to outweigh any increase in your income.

Nys also cuts the other way. The court presumes your income will rise enough for you to make payments and maintain a minimal standard of living, and you must show circumstances you cannot reasonably change. If you have a reasonable opportunity to improve your finances, you can’t choose not to take it (446 F.3d at 946).

Choosing a field is protected, but refusing to try alternatives is not. Nys recognized that a borrower who made a good-faith choice of career, and tried hard within it, shouldn’t be penalized because the field pays poorly (446 F.3d at 945 n.6). Nys rejected the argument that you must uproot your family or switch careers. That protection still doesn’t excuse turning down reasonable, available work outside the field (446 F.3d at 946; Birrane, 287 B.R. at 499).

Expected raises can defeat your case even when money is tight today. In In re Rifino, 245 F.3d 1083, 1089 (9th Cir. 2001), a single parent with a master’s degree in social work lost on the second prong. She had received two raises in three years, and uncontested testimony showed that social workers’ pay typically rises after about five years in the field, with paths to supervisory or private-practice work. No specific job offer was in the record. The court never reached good faith.

Pena adds one point in the borrower’s favor: the actual value of your education counts as part of this persistence question, though not as a stand-alone factor (155 F.3d at 1114). A credential that never raised your pay is evidence here, but it doesn’t carry the case alone.

A label without supporting facts doesn’t prove persistence. In Ng-A-Qui, the panel found no evidence that the borrower had been or would be denied work because of the age of her degree, and treated her young child’s care needs as temporary. In Birrane, 287 B.R. at 497–98, the panel found no evidence of a health problem that impaired the borrower’s ability to work.

Your job-search effort: the third prong looks back

The good-faith prong asks what you did to find work, increase your income, and deal with the loans. Two Ninth Circuit losses on this prong turned on specific, unused opportunities rather than on the borrower’s finances.

• In re Birrane, 287 B.R. 490, 497–501 (9th Cir. BAP 2002). The borrower worked part time, donated roughly as many hours to her own dance company as she worked for pay, and had not applied for social-work jobs, her bachelor’s field, in five years. The panel reversed her discharge on both persistence and good faith.

• In re Mason, 464 F.3d at 884–85. The borrower had a law degree, made one attempt at the bar exam without requesting testing accommodations, and did not retake it. His job search was inadequate, and he didn’t pursue the income-contingent repayment plan diligently. The bankruptcy court had found he couldn’t afford even a $164 monthly plan payment (303 B.R. 459, 465–66 (Bankr. D. Idaho 2004)), and the Ninth Circuit still found no good faith.

Hedlund and Roth, two later cases, show where the good-faith duty stops.

• In re Hedlund, 718 F.3d 848, 853–56 (9th Cir. 2013). The court declined to treat a spouse’s underemployment as the borrower’s own bad faith, where considerable evidence showed the borrower had maximized his own income (855). Hedlund also holds that good faith is mainly a factual finding, reviewed for clear error (853–54), so the trial record carries most of the weight on appeal.

• In re Roth, 490 B.R. 908, 917–20 (9th Cir. BAP 2013). Not enrolling in an income-driven plan is not automatically bad faith. The panel excused it where a 64-year-old borrower in poor health, with limited income and prospects, would have owed $0, likely for life (913, 919–20). She had applied for more than 280 jobs.

The DOJ attestation asks about your work in five places: your current job, household income, any history of unemployment, why your finances won’t improve, and what you’ve done to find work. The attestation applies to federal loans held by the U.S. Department of Education, and DOJ reviews it before deciding whether to agree to a discharge. The process comes from DOJ’s November 2022 guidance; as of October 2026, the form in use is the May 2025 edition. The full process is covered in how the DOJ attestation works.

Private student loans don’t go through the DOJ attestation. A private lender litigates private student loan discharge in court, where only the Ninth Circuit cases above apply.

The attestation form’s employment and income questions ask for:

• Question 9. Your current job and employer, or a checkbox stating “I am not currently employed.”

• Questions 11–13. Household income by source, verified with tax returns, four consecutive pay stubs, or other documents.

• Question 18. Whether a presumption applies, including that you have “been unemployed for at least five of the past ten years,” which asks you to explain your efforts to find work.

• Question 19. Reasons your finances are unlikely to improve, including “I am not currently employed” and being unable to find work in your field.

• Question 26. Other facts showing good faith, which the form says may include “efforts to obtain employment, maximize your income, or minimize your expenses.”

The public DOJ guidance and form contain no requirement that you be employed. The form lists current unemployment as an answer on two questions. Unemployment is a fact DOJ weighs, not an automatic approval, and how often these cases succeed depends on the whole record. The guidance says the good-faith standard assesses “the debtor’s efforts to obtain employment, maximize income and minimize expenses” (Guidance § IV.C, p. 11, quoting a Fourth Circuit case).

The DOJ guidance also says good faith “can be satisfied where debtors’ personal or family obligations significantly reduce their employment opportunities or increase their expenses.” The guidance tells DOJ attorneys that employment questions are case-specific and that you may explain your circumstances.

DOJ’s presumption of lasting hardship can be rebutted with facts, not guesses. The guidance says a rebuttal “must be based on concrete factual circumstances,” and that “mere conjecture” about your future earnings is not enough (Guidance § IV.B, pp. 9–10). The guidance’s own example is a job offer with a salary significantly higher than your current income.

DOJ compares your available income to the payment under a standard repayment plan over the remaining term, not to an income-driven payment, except where controlling law requires otherwise (Guidance p. 8 n.10). The guidance does not give you enforceable rights, and in court you still carry the burden of proof.

Five records prove income and job effort in a Ninth Circuit case: a job-effort log, an earnings chronology, employer records on pay and advancement, a training and credential comparison, and, for caregivers, a care-cost comparison. None of them requires a large application count or a paid expert. Each is built from documents a judge or DOJ attorney can check.

A job-effort log built from specific events

A job-effort log records each search as a separate event, not as a running total. Ninth Circuit losses turned on specific, unused opportunities, which a log of dated contacts answers directly and a claim of “hundreds of applications” does not.

The table below lists what each entry in a job-effort log captures.

Most job-search logs are reconstructed after the fact, and a reconstructed log holds up when it says so. A log that records when each entry was written, and counts each application once even when it went through several job boards, can be checked. A backdated entry, or a log that looks continuous but isn’t, puts the whole record in question. An honest explanation of a gap holds up better than no explanation.

Searches outside your degree field belong in the log, along with any steps toward fixing a qualification barrier, such as retaking a licensing exam or completing a short credential. Mason turned partly on that kind of untaken step.

An earnings chronology that separates your income

An earnings chronology shows what you have actually earned, year by year, and keeps your income separate from your household’s. Courts and DOJ look at both numbers, and mixing them makes your own earning capacity hard to see.

The table below lists what an earnings chronology tracks.

Tax transcripts, W-2s, and pay stubs are the sources for an earnings chronology. A month or year marked “unknown” is accurate; a zero entered in its place is not.

Employer records that answer the “you’ll earn more later” argument

When the other side argues that your income will rise, documents from real employers are the first answer. The Rifino borrower lost on uncontested advancement testimony: an unanswered projection can decide the second prong.

Dated job postings for roles you could realistically fill, and employers’ answers to specific questions, form this record: exact hours, pay step, benefits and deductions, credential requirements, and how people actually advance. A posting’s listed pay range is not proof you’d be hired at the top of it.

No Ninth Circuit case requires a vocational expert. In Pena, the court accepted the wife’s own testimony about her mental illness, backed by her disability-benefit records, with no expert (155 F.3d at 1113–14). An expert’s role is to answer the government’s own advancement evidence when documents alone can’t. In Hedlund, the bankruptcy court cited uncontroverted expert testimony that higher-paying jobs elsewhere would be offset by higher living costs (718 F.3d at 852).

A training and credential comparison for qualification barriers

A training and credential comparison shows what clearing a qualification barrier would cost, in time and money, and what it would add to your income. Mason lost partly on a bar exam the borrower took once, without requesting accommodations, and didn’t intend to retake, so an unexamined barrier is a gap in the record. A comparison that tests your existing degree first, and records actual funding awards rather than program listings, answers that gap with numbers.

The table below lists what a training and credential comparison tracks for each path.

A care and cost comparison if you are a caregiver

There is no caregiver exemption in the Ninth Circuit, but dependent care is one of the Nys factors, and you can prove its effect on your work. The proof has to be current. In Weldon (W.D. Wash. 2009, unpublished), a federal district court affirmed a denial where the household relied on childcare costs paid years earlier for full-time care, ignored reduced care needs once the children were in school, and left out evenings and weekends when the other parent could cover.

A care-coverage table answers the stale-cost problem in Weldon by showing who covers each block of hours in an ordinary week and in a disrupted one, and what the paid blocks cost.

The question is what a job would add to your household after the costs of taking it. A wage gain is not the same thing as money available for loan payments. In the illustrative example below, a job paying $2,600 a month adds $1,500 to the household.

That $1,500, before any change in benefits or other household income, is the figure compared against your expenses and the standard repayment amount.

A care-cost comparison holds up when it’s built on current quotes for care that fits your actual schedule: school hours, after-school programs, the other parent’s availability, and any state childcare subsidy you’ve applied for. Counting the same hours as both paid work and free childcare, or multiplying a school-year price by 12, distorts the comparison.