We’ve often talked about debt here at Perez Law Group, PLLC — credit cards, mortgages, auto loans, medical debt. It’s become an unfortunate part of modern life. Now, the younger generations are facing serious debt in one specific form: student loans. In fact, Forbes reports that U.S. student loan debt amounts to $1.56 trillion, making it the second highest kind of consumer debt. 

Faced with such statistics, it’s no surprise student loan forgiveness is a hot topic. It’s also no surprise loan forgiveness scams are on the rise. In fact, the scams have gotten so serious, the Federal Trade Commission launched a specific campaign to crack down on this burgeoning illegal industry. Amusingly called “Operation Game of Loans”, it took down fraudulent debt relief services that may have stolen over $95 million from their victims. 

Scammers target student loan debt because it differs from other debt. Unlike credit cards or auto loans, which can be discharged through traditional bankruptcy proceedings, student loans are rarely wiped clean. In order to have your student loans “forgiven”, you must be able to prove that paying them back will cause you “undue hardship”.

But undue hardship is a vague term, meant to allow a court to examine each person’s circumstances. This is both good and bad; you don’t have to demonstrate you meet a specific set of requirements, but you are also at the mercy of a somewhat subjective ruling. The most common defense invoked is “the Brunner test”, referencing a New York case that spells out more concrete parameters for undue hardship: 

  • You must prove that you will be unable to maintain a “minimal” standard of living if you repay the debt;
  • The circumstances making that repayment difficult are unlikely to change in the foreseeable future;
  • You have made a noticeable “good faith” effort to repay the debt despite these adverse conditions.

However, these parameters are still up for debate in each case, and if you seek to discharge your student loans, a bankruptcy attorney is essential. Our lawyers at Perez Law Group, PLLC can help prepare your evidence, advising you on whether a court is likely to rule in your favor. 

Because student loan debt is such a unique topic, it’s crucial to consult an attorney who can assess your specific situation. Contact Perez Law Group, PLLC today at (602) 730-7100 or fill out the form below to setup a consultation.

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