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How to file a petition for Bankruptcy Chapter 7 for Undue Hardship to forgive private student loans?

North Hollywood, CA |

I have 3 private student loans that are in collections and 1 government student loan in good standing. The collection agencies are going after me to pay off the balance (for the private student loans) with a one time payment. I have about $110,000 in private student loan debt. I also have about $9,000 in credit card debt in collection.
I have been unemployed for two years and just started a full time job a week ago.

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Attorney answers 6


It's very unlikely that with these facts you would be eligible for any help in the bankruptcy court. I would rather concentrate on working out an income sensitive payment plan with the student loan holders.


More often than not, student loans are not dischargeable in bankruptcy. There is one exception, which you mentioned, undue hardship. There are two tests for determining undue hardship: the Brunner Test and the Totality of the Circumstances Test.

The Brunner test requires three things: that you're in poverty, persistently in financial distress, and you made good faith efforts.

The totality of the circumstances test looks at all relevant factors in your case to determine whether undue hardship exists.

This is just a general explanation of the options available to you. For the most part, bankruptcy attorneys will provide free consultations. You should sit down with one and examine your particular situation. Like I mentioned, student loans are almost never discharged. Moreover, considering that you just started a full time job, you will likely not qualify. However, sit down with an attorney in your area to check.


As previously mentioned it is unlikely you will be successful under these facts. However, to answer your question, the process would be to file a chapter 7 petition and then file an adversary proceeding to declare the debts subject to discharge. This adversary proceedings, is in the nature of litigation, and it would not be recommended that you proceed without an attorney to represent you. You would need to be familiar with the law, the rules of procedure and evidence, compliance with applicable local rules, etc.


I agree with all the above in regards to it being EXTREMELY difficult to discharge student loans and, since you said you just got a new job, will most likely not work in your particular case. The only thing I would add is that you may be able to file for a Chapter 13 which will enable you to have some time to reorganize your finances without the harassment of the creditors. You should speak with a bankruptcy attorney about all these issues.


In order to discharge student loans you not only have to file your bankruptcy who MUST file an adversary proceeding to prove the undo hardship. This is a very difficult standard to prove. Their is a multi part test that must be met in order to prove the undo hardship.

This is not for the novice. If you want a much greater chance in a successful outcome I strongly urge you to hire a qualified Attorney. Keep in mind that any Attorney will charge extra for this. The banks will fight this tooth and nail.

I offer a free consultation if you are in the Los Angeles area. is my website.

Jonathan Leventhal, esq.
Leventhal Law Group, P.C.

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Unfortunately the "undue hardship" requirement to get student loans discharge is extremely difficult to meet unless you have some serious issues like (being involved in a car accident that left you with permanent brain injuries, being a senior with only social security as your income) and even in those situations expect to have a trial. For people drowning in student loan debt, particuarly private student loans (federal has some repayment options like "Income Based Repayment" and "Income Contingent Repayment) there are very limited options other than pay or pray that the statute of limitation expires and the creditor fails to file a lawsuit before that happens. As far as bankruptcy goes, at current time, we only have the option to file for chapter 13, which would force a certain repayment schedule on your creditors (the amount of your chapter 13 payment would be dictated by bankrutpcy rules) not voluntary arrangement with loan creditors. Don't know if this would help. You'd have to meet with a bankrutpcy attorney to discuss details. There are several bills that have been proposed to deal with the growing student loan crisis, but have very little traction in Congress other than support of some Democrats. It would be nice if you attempted to contact your representative and ask them to support these bills so that you along with millions of others in default can get some relief. In my personal opinion, we're not likely to see much of an economic recovery in this country if several generations are losing a large percentage of their wages in making student loan payments. But, I'm digressing. This issue is dear and near my heart and I sympathise as no doubt many attorneys who attended school in the last two decades are also struggling with massive student loans. The only positive thing I can say about private loans is that wage garnishments are capped in California so if/when the creditor sues they will only be able to take a precentage of your wages. Please see H.R. 2028 & H.R. 4170 for more information and groups like

Robert A. Stumpf

Robert A. Stumpf


Very well said, though I think the entire system of guaranteed loans is silly. Lending $100,000 to a person with no credit, probably few assets and perhaps no immediate job prospects is a bad idea to begin with, no matter the good intentions involved. Our legislators have made things worse by taking bankruptcy out of the picture. The answer is simple, we should find a way for people to file Chapter 13 plans and wipe out their student loans that way.

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