At the end of March 2018, there was a total of $1.4 trillion in student loan debt, according to the New York Fed. Across America, there are 44 million people – many of whom live in Mississippi – who have student loan debt, and it is highly unlikely that it can be discharged according to current bankruptcy laws. However, there is support for new rules that may make it easier to get rid of this type of an obligation in a bankruptcy proceeding.

Under proposed legislation, the definition of undue hardship would be broadened. To have student loan debt discharged, the borrower must show that being required to make payments would constitute an undue hardship. The Department of Education has asked for public comment about this issue as it believes that current rules are discouraging some debtors from filing for bankruptcy. There is no set definition of what an undue hardship is, which means that criteria are applied on a case-by-case basis.

Generally speaking, a person must pass the Brunner test to determine if he or she faces an undue hardship. To pass, an individual must show that paying the debt precludes him or her from maintaining a basic lifestyle for the next several years. The applicant must also show that an effort was made to make student loan payments prior to filing for bankruptcy.

Those who are experiencing overwhelming debt that can’t be repaid quickly may benefit from filing for bankruptcy. Doing so may allow a person to get a stay from creditor collection calls and letters. It may also make it possible to have student loan or other debts discharged in part or in full.