Student Loan Bankruptcy: How to Prove Undue Hardship with the Brunner Test
Student loan debt is a hot topic in the political arena. It was also the subject of an important recent decision by the United States Bankruptcy Court for the Western District of Wisconsin. In most cases, student loans cannot be discharged in bankruptcy unless the debtor can demonstrate that repaying these debts would impose an undue hardship. The case of Bradley A. Myhre v. U.S. Department of Education is a recent example of a case in which the court ruled in the plaintiff’s favor and demonstrates the difficulty in proving undue hardship in Milwaukee personal bankruptcy cases.
Bradley Myhre was injured on a swimming pool ladder in 1994. He suffered a C5-C6 injury to his spinal cord, which resulted in paralysis from the chest down and rendered him a quadriplegic. Myhre uses a wheelchair to get around and requires a full-time live-in caregiver to manage his everyday activities.
Prior to his accident, Myhre made hardwood trim and worked as a laborer. Afterwards, however, he relied on Social Security disability payments to provide him with living expenses. Myhre enrolled in college in 2000 and completed an associate degree in computer programming but was still unable to find a job. After five years of looking for work, he enrolled in an online course through Franklin University to obtain his bachelor’s degree. It was at this time that Myhre incurred the student loans relevant to his case.
While he was still attending online courses at Franklin University in 2010, Myhre received an offer of employment from Workforce Connections and began working at the company. The combined strain of working full-time and attending school was too much for Myhre in his disabled condition, and he stopped work on his bachelor’s degree after completing his current semester of studies.
Although Myhre attempted to support himself with his earnings from Workforce Connections, both he and his caregiver declared bankruptcy in 2012. The Department of Education argued that the student loans incurred by Myhre should not be discharged in the bankruptcy for a few reasons:
- Myhre was already a quadriplegic when he applied for and received the student loans in question.
- He was working full-time and was earning an income.
- Myhre did not enroll in a repayment plan as part of his bankruptcy proceedings.
- He also did not pay the Department of Education out of funds he received as an inheritance from his father.
The court ruled that Myhre had fulfilled the requirements of the Brunner test for undue hardship. This test requires that debtors demonstrate that repaying the loans would prevent them from maintaining a minimal standard of living, that this situation is likely to persist for a prolonged period of time and that the debtor must have made a good faith attempt to pay the loans. This allowed Myhre to discharge his student loans in his bankruptcy proceedings.
Burr Law Office offers practical solutions for Milwaukee personal bankruptcy cases to help our clients navigate the legal system successfully. Our team will work with you to represent your case effectively and to provide you with the right guidance and support throughout the bankruptcy process. Call us today at 262-827-0375 to schedule a free bankruptcy evaluation. We are here to help.