Legal Question in Bankruptcy in Oregon

Re: Limitations on bankruptcy

11 U.S.C. 523(8) excepts from dishcarge an educational loan insured or guaranteed by a govermental united unless excepting such a debt will impose an "undue hardship" on the debtor and the debtor's dependents. Bankruptcy courts in both Oregon and Washington follow the test established in Brunner v. New York State Higher Education Service Corp. to determine the existience of an undue Hardship. Under that test the debtor must establish that at their current income they are: 1)unable to maintain a minimal standard of living; 2) the circumstance contributing to the hardship is likely to persist for a significant period of time and 3) they have made a good faith effort to repay the student loan. Generally the debtor must prove poverty, some kind of long term physical or mental impairment and a period of time that they have been making payments or have received deferments or forebearance. If the debtor is seeking to have the court discharge a student loan the debtor must file an adversary proceeding asking the court to make the determination. The standard is fairly difficult to establish, but the facts in your particular case may be sufficent. Have a lawyer in your area review the facts before filing.