To discharge student loan debt via bankruptcy, you must demonstrate to the court that repaying your student loans will impose a ” undue hardship “. However, in our peer-reviewed analysis of over 700 student loan discharge cases from 1985 to 2020, we discovered that judges’ decisions to discharge student debts are frequently impacted by personal characteristics such as a borrower’s gender.
To establish whether repaying student loan debt imposes an undue hardship on the debtor, most courts employ three factors specified in a case called ” Brunner “.
To establish undue hardship under Brunner, debtors must first demonstrate that repaying their student debts will prevent them from maintaining a subsistence level of living. In other words, repaying the loan would deprive them of basic necessities such as food, clothes, and shelter.
Second, debtors must demonstrate that other facts suggest that their financial situation is unlikely to improve. Additional conditions may include a medical issue or responsibility for dependents. Thirdly, borrowers must demonstrate that they have attempted in good faith to repay their loans. This includes making loan payments or attempting to consolidate their debt.
Attaining these three conditions is difficult. According to our statistics, around 38% of debtors in the instances we examined achieved a complete or partial discharge of their college debts. However, we find that additional criteria are frequently considered in court rulings. Three variables stood out during our investigation.
1. Being a Single Mother Is Beneficial, While Not Being a Single Father Is Detrimental.
Judges frequently consider the expenditures connected with a debtor’s children when making student loan discharge judgments. Our research team discovered that the court occasionally considers the debtor’s status as a single parent. Being a single parent increased the likelihood of gaining a discharge by more than twice, but only for moms. Single fathers did not gain significantly from being a single parent.
We are unsure why courts believe single mothers are more deserving of a release than single fathers. This might be related to prejudices regarding moms being “caregivers” in the home, whereas males as the “breadwinners.” A mother’s request for assistance in fulfilling her responsibility as a caretaker may be more compelling than a father’s petition for financial relief.
2. Men Benefit From Disclosing a Medical Issue, While Women Do Not.
When determining a debtor’s ability to repay a debt, case law indicates that judges must take into account any difficulty a person may have locating a decent-paying work.
These conflicts are represented by the second Brunner criterion’s “added conditions.” Among these extra factors are medical problems. However, it appears as though judges give men’s medical concerns more consideration than women’s.
According to our data, males who disclose a medical issue are 93% more likely to receive a student debt discharge than men who do not disclose a medical problem. We did not see this impact in women. This gender disparity is significant, considering that female borrowers outnumbered male debtors nearly two to one in our analyses.
Women’s medical concerns appear to be disregarded or ignored in a variety of settings, ranging from courts to hospitals. Psychologists hypothesise that this may stem from perceptions that women exaggerate medical illnesses and discomfort.
3. Having No Attorney Jeopardises Your Claim
Due to the prevalence of crime dramas, the public is well aware that people who cannot afford an attorney can have one appointed for them. Unbeknownst to many, this fundamental privilege is limited to criminal procedures. In the majority of civil cases, such as bankruptcy processes, there is no right to counsel. When debtors lack the financial means to retain an attorney, they sometimes must represent themselves.
33% of debtors represent themselves in student loan bankruptcy proceedings, sometimes to their harm. We discovered that debtors who engaged an attorney increased their odds of receiving a discharge of their student debts by at least 60%. This was true regardless of the debtor’s gender.
The value of an attorney in court is widely established through studies. Attorneys that specialise in bankruptcy are likely to be familiar with the variables considered by courts and capable of presenting a compelling case for discharge. Without the assistance of an attorney, it can be challenging to choose which information to divulge and how to convey them.
Obtaining a discharge of student loan debt can be challenging and emotionally demanding.
If you are considering obtaining student loan debt relief, the following tips may be beneficial.
Create a plan that considers your gender: For single fathers, it may be beneficial to stress your “breadwinner” position and demonstrate to the court that you have made attempts to return the debts or have made a concerted effort to obtain a decent-paying employment. Provide as much proof as possible in the form of hospital visits, attempts to claim incapacity, and the like for women with medical issues.
Regardless of gender, keep in mind the importance of having an attorney: Acquaint oneself with local legal aid groups that may provide free legal assistance. Additionally, conduct a search for additional free legal material available on court websites and comparable locations.
None of this advice applies if you do not file a separate case to obtain a discharge of your student debts — as is the situation for the majority of student loan borrowers who file for bankruptcy. Students debts cannot be dismissed without a separate process. In 2017, around 241,000 persons in the United States with student loan debt filed for bankruptcy, but just 447 of those additionally filed a separate case to discharge their student debts. Consult the complimentary legal resources to determine how to proceed with this unique case.