There is good news for persons seeking to eliminate (or discharge) their student loans in bankruptcy. New guidance released by the Department of Justice (DOJ) on November 17, 2022, has made wiping out student loans more obtainable – especially when you have an experienced attorney to help you.
Historically, student loan discharges were difficult to obtain and overly intrusive in requiring personal information in order to meet the requirements of "undue hardship." While the undue hardship test is still essential, the new DOJ guidelines have provided clarity, established a model for consistency, and have simplified the process which will increase the number of cases receiving a bankruptcy discharge.
Undue hardship is typically defined as a situation where the borrower cannot maintain a minimal standard of living if they are forced to repay the loans and the hardship is expected to persist for a significant portion of the repayment period. The recently released DOJ guidance provides a more objective framework for applying the three-prong test courts have used in deciding undue hardship.
Additionally, the new DOJ guidance allows a borrower to submit an attestation as to his or her “undue hardship” along with the filing of an adversary proceeding in a bankruptcy. Briefly, an adversary proceeding is a lawsuit within a bankruptcy case challenging an issue (in this case, the dischargeability of your student loan debt). The attestation (which your attorney will help you set up and complete) is, basically, your declaration under penalty of perjury that the elements supporting your claim that repaying the student loans would cause an “undue hardship” are true.
In a free consultation, our experienced bankruptcy attorneys at DiMarco Warshaw will review your situation so they can determine how you may eliminate your student loan debt and other debts.
Andy Warshaw has been practicing bankruptcy law for about 15 years and is certified by the State Bar of California as a Specialist in Bankruptcy Law. Attorney Darren DiMarco has over 20 years of experience resolving all debt-related matters.
To speak to an attorney with your best interests in mind, schedule a free evaluation here https://calendly.com/dimarcowarshaw/20min or call us directly at 888-890-5474.
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