There are many concerns regarding student loans and bankruptcy. Student loans are typically non-dischargeable (not eliminated) in bankruptcy, notwithstanding the age of the loan.  However, if you can establish a substantial undue hardship, you can ask the court to discharge all or part of your student loan obligations through what is known as an Adversary Proceeding.  This includes both federal and private student loans.  “Undue hardship” is a very high standard and is generally interpreted to mean that:

(1) you cannot otherwise maintain an adequate standard of living in addition to repaying the loan, and

(2) these conditions are likely to remain constant over a substantial period of time.

An Adversary Proceeding is a lawsuit within your bankruptcy case about something related to the bankruptcy case.  For example, assume you took a large cash advance out of a credit card a few months prior to deciding to file for bankruptcy protection to pay your car payments so it wouldn’t be repossessed.  The credit card company may believe you planned to take the cash and then file bankruptcy so you wouldn’t have to repay the loan, which is fraud.  Debts incurred by fraud are non-dischargeable.  The credit card company could then file a complaint called an Adversary Proceeding in order to ask the court to determine whether you incurred the debt fraudulently.  The procedure following the Adversary Proceeding is akin to other litigation.  There is a complaint, an answer, discovery, possibly even depositions, and a trial where the judge would make the determination as to whether or not you committed fraud when you obtained the cash advance.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Student Loans and Bankruptcy, or any other Bankruptcy matters, please feel free to contact Joel E. Sannes at 480.461.5307, or log on to,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.