Can bankruptcy discharge student loans in California?

Only on a showing of undue hardship: 11 U.S.C. § 523(a)(8) excepts student loans from the ordinary discharge unless the debtor proves, in a separate adversary proceeding, that repayment would impose undue hardship. In California's Ninth Circuit that means the Brunner test, minimal living standard, persistence, and good faith.

Student loans are not discharged automatically; the debtor must file an adversary proceeding, a lawsuit inside the bankruptcy, and prove undue hardship under 11 U.S.C. § 523(a)(8). Courts in the Ninth Circuit, which includes California, apply the Brunner framework: the debtor cannot maintain a minimal standard of living if forced to repay, that state of affairs is likely to persist for a significant portion of the repayment period, and the debtor has made good-faith efforts to repay. The standard has softened in application: 2022 federal guidance created an attestation process for government-held loans under which the Department of Justice can agree that hardship exists in qualifying cases, and courts have discharged partial balances. Some private loans fall outside section 523(a)(8) entirely; loans that are not qualified education loans, such as certain bar-study or living-expense products, are dischargeable like ordinary debt. Where full discharge is out of reach, Chapter 13 can hold payments and collection at bay for the life of a three-to-five-year plan.

Authority: 11 U.S.C. § 523(a)(8)