Can I discharge my student loan debt in bankruptcy?

In North Carolina, student loan debt is generally not able to be discharged in bankruptcy. Under the law, student loan debt is considered to be an obligation you lawfully owe and cannot be cancelled in bankruptcy. To discharge a student loan debt in bankruptcy, a debtor must file an adversary proceeding and prove that one of the following applies: (1) repayment would impose an undue hardship on the debtor and the debtor’s dependents; (2) the debtor is impaired; or (3) the loan was obtained by fraud. The most common way to try and discharge student loan debt in bankruptcy is to prove undue hardship upon the debtor and his/her dependents. To prove undue hardship, the debtor must demonstrate that he/she is unable to maintain a minimum standard of living if he/she is forced to repay the loan and that the situation is unlikely to improve in the near future. Unfortunately, given the significant burden of proof necessary to discharge student loan debt in bankruptcy in North Carolina, it is not common for courts to grant such requests. However, if a debtor is able to prove one of the three conditions mentioned above, then it is possible to discharge a student loan debt in bankruptcy.

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Can I discharge my student loan debt in bankruptcy?

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