With college tuition continuously on the rise, more and more bankruptcy lawyers have recognized the extreme difficultly that Americans are having in paying off their student loans or discharging this debt through bankruptcy. In a recent study released by the Federal Reserve Bank of New York, the balance of student loans has increased to $870 billion, with 27 percent of borrowers at least 30 days behind on their payments. With the cost of college tuition increasing six-fold since 1985, many of the debts on these students are even affecting the cosigners of the loans, or their parents. According to bankruptcy attorneys, these are some of the most difficult debts to discharge with a bankruptcy proceeding, as many of these people do not meet the financial hardships required to discharge a student loan debt.

How can a student loan be discharged? While many talk about the impossibility and the difficulty associated with discharging a student debt through bankruptcy, an attorney will be able to provide you with some invaluable insight on the topic. In order to discharge this type of debt, which averages now around $25,000, you must be able to prove that you have shown an undue hardship. The first part of the test to prove this requires the debtor to prove that he or she cannot maintain the minimal standard of living on their current income if they are forced to pay off student debts. Second, the debtor must show that circumstances exist that are likely to prevent the debtor from maintaining a minimal standard of living throughout the entirety or a significant portion of the repayment period. Lastly, the debtor must prove that he or she has made good faith efforts to repay the loans.

This test, entitled the Brunner Test, stems from a 30 year old case in which a woman, Marie Brunner, attempted to discharge student loans in total of $9,000 a year after obtaining a Master's Degree before attempting to make any payments on the loan, but had reportedly purchased a car in cash two months prior to filing bankruptcy to discharge the student loans. Since then, federal bankruptcy courts in all but one circuit have made it much more difficult to discharge student debts when filing for bankruptcy by using the Brunner Test. Nearly every court, however, uses different levels for the "minimal" standard of living. While some use the federal poverty level to determine the minimal standard of living, others determine that the absolute minimum is any person whose income is below 150% of the poverty level.

Despite the heavy increase in costs of living and the price of education, discharging debt and student loans has only become more difficult for debtors in the United States. It requires the legal assistance of a skilled bankruptcy attorney to understand the proper legal action to take and which chapter of bankruptcy to file to effectively discharge student loans. As with many unsecured debts, student loans are viewed as some of the most difficult to discharge because they are not backed by any type of physical object (such as in the case with a mortgage and a home). Creditors are often much more unwilling to release these debts, but a local bankruptcy attorney will be able to help you understand the rights you have at the current time.

Do not face bankruptcy alone. Mistakes during filing bankruptcy or during your attempt to discharge the student loan can possibly cost you even more, so making sure that your case is backed by your local bankruptcy lawyer is absolutely pivotal. To learn more about filing for bankruptcy and the great benefits it may offer you, please do not hesitate to involve a nearby bankruptcy attorney!