How Does the Brunner Test Affect Student Loans in Bankruptcy?

 Posted on May 17, 2025 in Bankruptcy

Education is a key to opportunity and, in today’s world, having a college or advanced degree can make a significant difference in the employment and earning opportunities available to you. Education is also incredibly expensive, and most people need to take out student loans to finance theirs. Sometimes, however, the burden of paying back those loans becomes too much to handle, or life events pile on unexpected financial issues that compound debt. In such cases, individuals with a great deal of debt might consider filing for bankruptcy. Student loan debt may not always be dischargeable in bankruptcy, however, and the Brunner Test can help determine whether or not it can. Speak to an experienced Galveston, TX bankruptcy attorney for advice on your specific case. 

What Happens to Student Loans in Chapter 7 Bankruptcy?

Most bankruptcy courts in Texas use the Brunner Test to determine whether you qualify to have your student loans discharged in Chapter 7 bankruptcy. Under this tough three-factor test, the court will consider whether:

• You would be able to maintain a minimal standard of living if you had to repay your loans. 

• Your current financial situation is unlikely to change anytime soon.

• You can demonstrate that you made a good-faith effort to repay your student loans. 

Practically speaking, it is difficult to pass the Brunner Test unless you can show, for example, that you are living below the poverty level, are older and unlikely to have any job prospects, or have a debilitating illness that makes it unlikely that your financial circumstances will change.

What Happens to Student Loans in Chapter 13 Bankruptcy?

Chapter 13 works a little bit differently than Chapter 7. In Chapter 13, you would make a repayment plan that would allow you to restructure your debt and repay it over three to five years. Although your student loan debts would not be discharged in Chapter 13, it would stop your monthly student loan payments while the bankruptcy case proceeds, giving you more time to discharge your remaining debt. This could potentially make it easier for you to repay it. 

Call a Galveston, TX Bankruptcy Attorney 

At The Fealy Law Firm, PC, attorney Vicky Fealy represents good people going through hard times. If you have overwhelming student loan debt, our experienced Fort Bend, TX bankruptcy attorney can go over your case to see what your options are in bankruptcy and beyond. Call the office at 713-526-5220 for a complimentary consultation.