The History Of Bankruptcy, Part 9: Why Can't I Discharge My Student Loans In Bankruptcy?

http://www.goodbye2debt.com/ Law Offices of Nicholas Gebelt 15150 Hornell St Whittier, CA 90604 (562) 777-9159 Student loans weren’t always part of American life. After World War II, the GI Bill let the government guarantee loans so returning veterans could get an education, and the idea eventually expanded into a general student loan program, still government-guaranteed. When people started discharging that debt in bankruptcy shortly after graduating, Congress got concerned about the cost to taxpayers and began restricting it — first requiring five years of payments before you could discharge student debt, then seven, and eventually writing an “undue hardship” standard directly into the Bankruptcy Code (Section 523(a)(8)) that applies indefinitely. Courts struggled with what “undue hardship” actually meant until a case called In re Brunner set out a three-part test: you can’t maintain a minimal standard of living right now if you have to repay the loan, that condition will persist for the life of the repayment period, and you’ve already made a good-faith effort to repay. Meeting that standard requires filing a lawsuit within your bankruptcy case (called an adversary proceeding) and convincing a judge — no jury — that you qualify, which historically was a tough position for the self-represented debtors who most needed it. More recently, the Department of Education created a program allowing debtors to submit a detailed financial declaration; if the DOE agrees it looks like an undue hardship, they won’t oppose the adversary proceeding, meaningfully increasing the success rate. That program currently applies only to federal loans — private student loans are a tougher, case-by-case fight, with no guarantee either way. 📢 Disclaimer: This video is intended for educational and informational purposes only and does not constitute legal advice. Watching this content does not create an attorney-client relationship. For legal guidance specific to your situation, please consult a qualified attorney. We comply with YouTube’s content policies and this video is not meant to promote any unlawful practices. For More Information About Bankruptcy, Please Visit: https://en.wikipedia.org/wiki/Bankrup... For More Videos, Subscribe Our Channel:    / @lawofficesofnicholasgebelt6129