What are the criteria for determining "undue hardship" for bankrupting student loans? My husband and I have over $150,000

It seems you are looking for a guarantee of the results and, unfortunately, you are not going to get that from any reputable attorney. As you have correctly deduced, the standard is very subjective. Two judges could consider exactly the same set of circumstances and reach two different conclusions. Based only on the facts you have given, I agree that it seems likely that you are the type of debtor the code was designed to help in this situation. To give you a more concrete answer would require knowing all of the facts about your financial situation. That takes time and that is why attorneys would have to charge you additional fees to frame the issues in favor of a hardship finding in the light most favorable to you. This has to be done whether the judge ultimately agrees or not. Only you can know whether or not the possibility of getting all or a part of the student loans discharged or reduced is worth taking the risk that the bankruptcy filing will not be productive. I agree it is a difficult decision. If you have not done so already, I urge you to set up an appointment with a local bankruptcy attorney to fully discuss your situation. There may be other issues that go into your decision, such as whether you will qualify for a Chapter 7, how a Chapter 13 plan might ease your financial situation for a period while your careers, and hopefully incomes, begin to rise, and many others that you may not even realize. Many attorneys will offer a free initial consultation. Take advantage of this. Ask about the costs and then make an informed decision.

If the bankruptcy case was filed after October 8, 1998, the loan obligation is not affected by a bankruptcy discharge unless the debtor received an undue hardship ruling from the court. Factors to consider in determining whether the debtor is suffering from an “undue hardship” include whether 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans.

Representation for undue hardship will normally cost more than a standard bankruptcy case.

I wish politicians would pay more attention to the burden many people carry because of their student loans, which years back were dischargeable. For many the burden has become as challenging as the recent mortgage crisis. Having said that I don't think change in these laws will happen any time soon.

And so you're options are either to pay, stop paying and risk these companies going after your wages, or declare bk on what is dischargeable. You're situation is complex enough that I would strongly suggest you talk to an attorney who can advise you as to whether 7 or 13 is the better option. The challenge with hiring an attorney and trying to litigate the dischargeability of your student debt is that I've yet to meet anyone that has done this successfully short of a client being incapacitated. It'll cost you at least 10k to litigate this because the attorney will probably spend a good 10 plus hours preparing the argument and I'm sure he/she will charge at least $150/hr.

Best wishes on getting this resolved.