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Chapter 7 discharge of student loans. what are the odds of winning discharge under the following fact pattern?

Riverside, CA |

150k in student loans.

On permanent disability for past 10 years because of severe Bi-polar that has not responded well to medication. Get severely depressed at times and must take breaks from school, etc.

Being told I have had too many accomodations at school and taken too long to finish my Master's program. Thus, I am being kicked out of the program and will likely never get my degree.

So, I make about $900 on disability. On a scale of 1-10 (10 being a good chance) what do you think?

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Attorney answers 6


Seek an administrative discharge before testing your odds in bankruptcy.



what is an administrative discharge?

Gary Alan Armstrong

Gary Alan Armstrong


On federally guaranteed loans you can actually apply for a discharge straight from the department of education. That's the administrative discharge referred to. Look at the DOE website for more info and forms. You need a signoff from a doctor, which can sometimes be difficult to get. And, the paperpushers at the DOE and loans servicers are very nit-picky about the papers being filed perfectly, with every i dotted and t crossed. But, if you can get this done, it's worth a try before bankruptcy.

Gary D. Bollinger

Gary D. Bollinger


Attorney Armstrong is right on point!


Avvo Email

No discharge likely in Southern District of CA — but you could try.

Daniel Shay

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As it sounds like you are aware of, it is very difficult to obtain a discharge of student loan debt; however, there are rare cases where the debt can be discharged and your case certainly has a good fact pattern to argue. Each circuit (and even some district courts) have different rules regarding how to determine hardship. If you contact an experienced bankruptcy attorney in your area, he/she will be able to compare your facts to case law in your district and will be able to give you his or her opinion of your chances. The attorneys fees for an action to discharge your student loans can be very expensive; however, the payoff would be certainly worth it in your case (relief of 150,000!). I would not recommend going it alone if you want a serious shot at obtaining relief from your student loans. Good Luck!


Getting student loans discharged is very difficult. Further, it depends on many factors. The fact that you have been on permanent disability for 10 years is a factor in your favor. However, many more facts need to be known, which would have to be developed by you working with an experienced Bankruptcy attorney. Such facts would include, but are not limited to: your age, whether you have dependents, your living situation, the severity of your disability as shown by medical professionals, how long you have had these loans, and what payments you have made on them, if any.

The Bankruptcy Courts look at 3 factors, as set forth in the case of of Brunner vs. New York State Higher Education Services Corp., 831 F.2d 395 [2d Cir. 1987]).

These factors are:

(1) That the debtor cannot maintain, based on current income and expenses, a minimal standard of living for the debtor and dependents if forced to pay off student loans;

(2) that 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) that the debtor has made good faith efforts to repay the loans.

Obviously, more facts need to be known about your situation. So it is very difficult to say what your "chances" are of getting a discharge. You also must understand that ultimately, it is up to a judge, and whether he or she believes you have passed these tests. Finally, the court does have authority to grant a partial discharge of the debts.

Our office is located in Santa Ana, CA, and we handle cases throughout Southern CA.


I think the key issue here is whether or not your medical condition makes it very unlikely that you will not be employable for the duration of your life (i.e. you don't have any realistic chance of paying the loan back).

The fact that you have been of perm. disability is very favorable to you, but what has your employment history been during that time period?

It is likely that seeking a discharge of your student loans would be fairly costly if you hire an attorney to help you out. If you try and do it on you own, you might be successful, but it is not easy to practice law even as a lawyer.

I hope you get better some day.



I would agree with the other contributors. A discharge of student loans in bankruptcy is very difficult, unless you can prove that repaying the loan creates an undue hardship on you or your family. Proving hardship usually requires showing that you can't provide a minimum standard of living for yourself and your dependents if you have to repay the loan. Considering your situation, you have a good chance of proving hardship. But, you will need a lawyer.

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