What is the Brunner Test?

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Do I need an attorney to file bankruptcy?”


A recent bankruptcy case out the Seventh Circuit Court of Appeals dealt with the increasingly thorny issue of student loan debt. Sadly, the Court ultimately ruled against the debtor in this case, holding that he had failed to make a good faith effort to repay his debt under the Brunner test. So what is the Brunner test and what impact does it have on a bankruptcy case? To find out more, keep reading.


Checklist 1 Charlotte Bankruptcy Lawyer North Carolina Debt AttorneyTetzlaff v. Educational Credit Management Corporation


The recent case before the Seventh Circuit involves a request for bankruptcy protection by a man currently living with his mother and subsisting on income from her Social Security payments. The man is currently unemployed and has pursued both an MBA as well as a law degree. More than a decade ago, he consolidated his student loan debt and is now the guarantor for the outstanding loan amount, approximately $260,000.


The man has so far been unable to pass a state bar exam and has thus been unable to find a job that pays enough to ever be able to repay the vast sums borrowed. He then sought bankruptcy protection, hoping that his situation was sufficiently dire to warrant relief.


The Brunner test


The current standard by which most bankruptcy courts are determining if student loans are dischargeable in a bankruptcy is known as the Brunner test. The Brunner test requires those requesting debt relief to demonstrate three things:


  1. That he or she cannot maintain, based on his or her current income and expenses, a minimal standard of living if forced to repay the loans;
  2. Additional circumstances that indicate this state of affairs is likely to persist for a substantial portion of the repayment period; and
  3. That he or she has made good faith efforts to repay the loans.


Again, the Brunner test is the approach typically taken by bankruptcy courts across the country, though it is not the only possibility. Some courts have been known to use a totality of the circumstances test, simply looking at all the facts to decide if bankruptcy relief for student loans is justified.


When is relief possible?


The reality is that it is very difficult and sometimes even impossible to get student loan debt discharged in a bankruptcy. The laws have been written in such a way as to prevent all those except the most extreme cases from receiving relief. That being said, if you are able to pass the three components of the Brunner test you may be eligible for bankruptcy relief.


Just how strictly courts interpret Brunner depends on which judge you happen to be in front of. Experts say that a good rule of thumb for judging the success of a claim under the Brunner test is the following example: if a family earns a modest income and lives off a budget without unnecessary expenditures, yet the budget is still unbalanced due to student loan debt, there may be a sufficient basis for a hardship discharge of student loan debt. Though possible, it is crucial to understand that such discharge is exceedingly difficult to secure.


If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.



About the Author

Bryan 1Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.

Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.

In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.







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