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  1. #1
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    Jan 2014
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    Default When Can You Claim Undue Hardship to Get Student Loans Discharged

    My question involves bankruptcy in the state of: FL (which is a state requiring FL exemptions)

    I'm having trouble finding out what, precisely, constitutes 'undue hardship', perhaps this is case-by-case?

    This is in the context of a chp.7, apprx.$75k in total debt, about half of which is school loans (predominantly gov-insured loans). If that's the situation, and the person has not worked more than ~6mo total in the past ~4yrs, and has lived couch-to-couch/poverty/etc, is still unemployed/ and sleeping on a family member's floor, is it conceivable that gov't-insured school loans could be considered 'undue hardship' and be discharged?

    I have to imagine there's some type of psychological thing that "for red tape reasons" could be diagnosed (in theory), but is that requisite when it's clear that a person's been a complete bum for years, their EBT card being their greatest asset by far, and they've got years'-old school loans (~9yrs ago was when graduation would have been if they'd finished their degree)? I guess I'm not sure how it goes in practice, but the way I (want to)interpret it would be that the repayment of the school loans would present an undue hardship, in that neither a chp7discharge, nor a chp13 workout program, could ever be expected to work out (unless they somehow did an about-face/180 and suddenly became gainfully employed for the first time in ~half decade)

    (am also curious, to an incredibly lesser extent, whether speeding tickets that are years' old would be the same? Although that's pretty irrelevant, as the school loans being non-dischargeable would make a 7 or even a 13 plan not worthwhile, the 'fresh start' would not, in such context, be remotely fresh)

    - - - Updated - - -

    [as example, I came across the following passage:
    "As a general rule, if the debtor is not living in a cardboard box under the freeway, there is no undue hardship, and student loans have to be repaid. "
    While it's not quite that, debtor hasn't had a personal residence (or rented/shared apartment) in many, many years; sleep/shelter have been entirely amongst friends, family, etc., the person is a regular at the food pantries, and 9 days out of 10 for the last years, would literally not have had a quarter to their name. They've had some short spats of work (the longest was 3months independent contractor [over a year ago], the rest were cash-paid weekend jobs, that'd last for a weekend, usually mowing lawns. This is far beyond 'poverty' in any definition but I guess I'm unsure whether the facts are enough for hardship, or whether they should see a shrink, get whatever appropriate agoraphobia/anxiety-attacks/whatever the dr thinks is most appropriate to term this person circa the past years, before even being able to file this bankruptcy]

  2. #2
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    Default Re: 'undue Hardship' Outside of Diagnosed-Problems; Priority Claims

    If simply arguing you were a deadbeat couch surfer at moms house was sufficient to relieve one of tens of thousands in debt, we would have you adults lining up so they could buy a new car next year. I suggest you Google the Brunner Test.

  3. #3
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    Default Re: 'undue Hardship' Outside of Diagnosed-Problems; Priority Claims

    Quote Quoting Disagreeable
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    If simply arguing you were a deadbeat couch surfer at moms house was sufficient to relieve one of tens of thousands in debt, we would have you adults lining up so they could buy a new car next year. I suggest you Google the Brunner Test.
    It looks like the brunner test does pass in this case.. if someone's been surfing couches that were in below-poverty houses for many years (and is in their 30's, not a young adult), and were unlikely to purchase a car/anything next year (persistence: circumstances unlikely to change soon), and the person themselves hasn't had a penny in years. Am I missing something? I wish this brunner test were as specific as the means-test :/

  4. #4
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    Default Re: 'undue Hardship' Outside of Diagnosed-Problems; Priority Claims

    Proving hardship is incredibly difficult.

    But I do have a quick question. Has there been any effort to pay of the loans at all? If so, when?

    Yes, it matters.

  5. #5
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    Default Re: 'undue Hardship' Outside of Diagnosed-Problems; Priority Claims

    In earlier/mid 20's the loans were 'scheduled deferred', and at a point in mid-20's they became due and were unpaid, went to collections, and collections gave up sending warnings a couple years ago.

  6. #6
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    Default Re: 'undue Hardship' Outside of Diagnosed-Problems; Priority Claims

    As no attempt has ever been made to pay them, relief is unlikely. That is the third part of the Brunner Test.


    Quote Quoting DerekS79
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    In earlier/mid 20's the loans were 'scheduled deferred', and at a point in mid-20's they became due and were unpaid, went to collections, and collections gave up sending warnings a couple years ago.

  7. #7
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    Default Re: When Can You Claim Undue Hardship to Get Student Loans Discharged

    Quote Quoting DerekS79
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    I have to imagine there's some type of psychological thing that "for red tape reasons" could be diagnosed (in theory)
    What are we really talking about, then, if not mental illness? Yo don't mention physical infirmity. Are we talking about substance abuse?

  8. #8
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    Default Re: 'undue Hardship' Outside of Diagnosed-Problems; Priority Claims

    Quote Quoting Disagreeable
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    As no attempt has ever been made to pay them, relief is unlikely. That is the third part of the Brunner Test.


    Yeap, that's where I was going with it.

    It's a critical part of the Brunner Test.

  9. #9
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    Default Re: 'undue Hardship' Outside of Diagnosed-Problems; Priority Claims

    Sorry I sniped your thunder.

    Quote Quoting Dogmatique
    View Post
    Yeap, that's where I was going with it.

    It's a critical part of the Brunner Test.

  10. #10
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    Jan 2014
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    Default Re: When Can You Claim Undue Hardship to Get Student Loans Discharged

    Quote Quoting aaron
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    What are we really talking about, then, if not mental illness? Yo don't mention physical infirmity. Are we talking about substance abuse?
    it is mental illness, just not diagnosed. Perhaps going to a state shrink, first, would be smarter than just filing?

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