What The Brunner Test Is—And How It Can Help Discharge Student Loan Debt

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

When you file for bankruptcy in Houston, many if not all of your debts are dischargeable or cancellable by the bankruptcy, assuming that you receive your discharge.

Student loans, however, are not usually discharged, unless you can show "undue hardship." The only way a judge will consider getting rid of your student loan debt is if it is determined that you are suffering from undue hardship. You may feel like you are suffering from undue hardship, but the judge may end up deciding otherwise. Most judges will base their decision using something called the Brunner test.

The Brunner test has three parts that evaluate whether or not a debtor can afford to pay off their student loans. The Brunner test is named after the case in which it was first used, Brunner v. New York Higher Education Services Corp. The debtor must show the judge that:

  1. He has made good faith efforts to repay his student loans.
  2. He cannot maintain, based on current income and expenses, a "minimal" standard of living for himself and his dependents if forced to repay the loans.
  3. 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.

Proving undue hardship is tough. It's likely that you're not going to get your student loans discharged. However, just because you don't get all your student loans forgiven does not mean you can't negotiate a student loan payment plan. You might end up paying more in the long run, but it also might mean the difference between being able to afford your monthly payment and defaulting on your loans. Your other options may include:

  • Consolidation. This can help lower your payment and lock in a lower interest rate.
  • Income-Based Repayment. If you meet the federal definition of partial financial hardship, you might qualify for a reduction in your monthly payment.
  • Graduated Repayment. For certain eligible loans, you can ask for reduced payments for the first few years when you get out of school.
  • Extended Repayment. This lowers your monthly payment by extending your repayment period up to 25 years if your FFELP loan balance exceeds $30,000.
  • Economic Hardship Deferment. You might qualify to have your loans deferred for a certain period of time if you are experiencing financial hardship.
  • Unemployment Deferment. If you're working less than full time, but currently seeking full time employment, you might qualify for unemployment deferment.

Having student loan debt can be overwhelming, but it is not impossible to get control of.

Call Houston debt attorney J. Thomas Black for a free consultation about the best ways to manage your student loans at 888-707-1233.