Christopher S. Mulvaney,

Attorney and Counselor-at-Law

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THIS WEBSITE INCLUDES GENERAL INFORMATION & THE OPINIONS OF CHRISTOPHER S. MULVANEY. IT IS INTENDED TO STIMULATE A BASIS FOR QUESTIONS RELATED TO YOUR PARTICULAR FACTUAL CIRCUMSTANCES — BEFORE YOU ACT.  THIS WEBSITE DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU WANT LEGAL ADVICE, PLEASE MAKE A ZOOM APPOINTMENT TO SPEAK WITH ME.

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Gonzaga University School of Law – Spokane, Washington – Class of 2002 – Cum Laude The Latin phrase “Deo patriae, scientiis, artibus” translates to “For God and country through sciences and arts”.  The initials A.M.D.G. on the seal of Gonzaga Law School stand for Ad Majorem Dei Gloriam, which is Latin for “For the Greater Glory of God” the Motto of the Society of Jesus (Jesuits): a Catholic religious order founded by St. Ignatius of Loyola.

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Are student loans dischargeable in bankruptcy?

Yes, student loans can potentially be discharged in bankruptcy, but it’s not a straightforward process and requires proving “undue hardship”.  The process can be expensive and time consuming. Often the discharge doesn’t mean much because the debtor is collection proof anyway, meaning that there is nothing that can be done to collect the student loan debt.

Key points

Increased Success Rates: Under the new federal guidance, a high percentage of cases seeking student loan discharge have resulted in full or partial discharges. 

Undue Hardship: The central requirement is demonstrating to the bankruptcy court that repaying your student loans would cause “undue hardship” to you and your dependents.

Adversary Proceeding: This isn’t automatic with bankruptcy filing. You must initiate a separate lawsuit within the bankruptcy case, called an “adversary proceeding,” specifically to request student loan discharge.

The Brunner Test: Most bankruptcy courts use the “Brunner test” to determine if undue hardship exists. This test requires showing that:

You can’t maintain a minimal standard of living for yourself and your dependents if forced to repay the loans.

Your financial hardship is likely to continue for a significant portion of the loan repayment period.

You’ve made good-faith efforts to repay the loans.

Federal Loans: Recent guidance from the Department of Justice and Department of Education has made it easier for eligible federal student loan borrowers to obtain discharges, leading to increased success rates. Currently, only Direct Loans and Direct Consolidation Loans held by the U.S. Department of Education are explicitly covered by this new guidance.

Private Loans: Private student loans can also be discharged in bankruptcy, also requiring the demonstration of “undue hardship,” though this can be more challenging than with federal loans.

Not All Loans are Equal: Some types of private loans for educational purposes may be dischargeable under standard bankruptcy rules without needing to prove “undue hardship,” according to the Consumer Financial Protection Bureau. This includes situations where the loan amount exceeded the cost of attendance.

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Washington State residents can meet with me in Zoom/DocuSign from anywhere in the world, and I can notarize their electronic signatures because I am a remote online notary.  Just email me an image of your photo ID.