For many people in Oregon struggling with insurmountable debt, student loans may comprise a significant portion of the overall burden. Across the country, over 44 million people collectively owe $1.5 trillion in student loan debt, forming the second-highest category of consumer debt. While home mortgages continue to take the lead, student loans outweigh credit card obligations for Americans nationwide. Despite the significant cost of student loan debt, it is one of the most difficult forms of obligation to discharge in bankruptcy.

Before 1976, it was significantly easier to include educational debt in a bankruptcy filing. A series of legal changes made it progressively harder to do so, and in 2005, Congress included private student loans in an exemption from bankruptcy relief. Nevertheless, some people still seek to discharge this debt in bankruptcy, even if there is a high burden to meet in order to do so. Most bankruptcy courts use a common test to determine whether a borrower is suffering undue hardship, the exceptional scenario in which Congress allows debt relief for student loans.

Courts look to see if the borrower has some type of unusual or extenuating circumstances preventing them from repaying the loan while maintaining a standard of living. Disability acquired after the education loans may present one such example. In addition, these circumstances must not be transient; they must be expected to continue in the future. In addition, the borrower should be able to show attempts to pay back the loan.

In most cases, it is very difficult to meet these standards, but some people do find success in discharging their student loans. For people struggling with other kinds of debt, including credit cards and medical bills, Chapter 7 bankruptcy might provide significant relief. A bankruptcy attorney may help people understand the law and take action to seek debt relief.