How to Request an “Undue Hardship” Discharge of a Student Loan in Bankruptcy and Complete the New Required Affidavit Online

How to Request an Undue Hardship Discharge in Your Bankruptcy Proceeding 

In bankruptcy, an undue hardship complaint is a legal claim filed under §532(a)(8) of the bankruptcy code (11 U.S.C.) that a debtor can make to seek relief from their student loan debt.

If a debtor can prove that paying off their student loan debt would cause undue hardship, they may be able to have all or part of their student loan debt discharged as part of their bankruptcy proceedings.

To file an undue hardship complaint in bankruptcy, the debtor must follow the following steps:

1. Determine whether they are eligible to file an undue hardship complaint. To file an undue hardship complaint, the debtor must be able to demonstrate that repaying their student loan debt would cause undue hardship. (See below)

2. File a bankruptcy petition. The debtor must first file a bankruptcy petition to start the bankruptcy process. This involves filling out and submitting the appropriate paperwork to the bankruptcy court.

3. File an undue hardship complaint. After the bankruptcy petition has been filed, the debtor can file an undue hardship complaint with the bankruptcy court. This typically involves submitting a written complaint outlining why the debtor believes repaying their student loan debt would cause undue hardship.

4. Attend a hearing. After the undue hardship complaint has been filed, the bankruptcy court will schedule a hearing to consider the complaint. At the hearing, the debtor will have the opportunity to present evidence and testimony supporting their undue hardship claim. The bankruptcy court will then decide whether to grant the undue hardship discharge.

It's important to note that the process for filing an undue hardship complaint can vary depending on the jurisdiction in which the bankruptcy case is being heard. It's a good idea to consult with a bankruptcy attorney or a legal aid organization for specific guidance on filing an undue hardship complaint in your area.

Step 1. Determining if you are eligible for an undue hardship discharge

This website can help you determine whether you are eligible for an undue hardship discharge.

Under new rules promulgated by the Department of Education in a guidance memo to their attorneys who represent creditors in student loan matters in bankruptcy cases, student loan debtors can get the Department of Education to stipulate their eligibility for an undue hardship discharge if they can satisfy specific criteria outlined in a standardized affidavit that the debtor will be asked to complete if they seek an undue hardship discharge in their bankruptcy proceeding.

We're working on a new Online interactive version of the student loan affidavit and will unveil it in early 2023. The online version of the affidavit will guide you through the questions asked by the new affidavit.

Here are the essential elements you'll need to establish if you hope to get your student loan discharged.

1. This typically requires the debtor to show that:

   1. They could not maintain a minimal standard of living if they were required to pay back their student loans and

   2. That this situation will likely continue for a significant time.

Remember, this is a factual inquiry, so it's essential to focus on how you will make your case factually.

The essential elements you're trying to prove are:

1. You are honest and hardworking and have attempted to cut costs and maximize your earnings as best as you reasonably can.

2. Your earning potential is unlikely to improve because of extenuating circumstances either in your own life or in society at large that make it unlikely to significantly change from what it is now.

3. Those circumstances make it impossible to pay down your student loan debt based on nationally accepted standards for living expenses in your area.

4. You've explored payment-reduction options offered by the government and concluded that you will need more relief.

5. Your prospects are unlikely to improve in a relevant period either because of your condition, economic conditions, or your age, or any combination of factors, which you must explain to the court