Since November 2022, borrowers with federal student loans have had a clearer path to discharge in bankruptcy: the Justice Department's attestation process. Here is how a case moves from start to finish.
Step 1: You're in a bankruptcy case
The student loan request is made inside a bankruptcy case. You may be filing one now, already be in one, or have a case that closed. In many situations, a closed case can be reopened to file the student loan request.
Step 2: Your attorney files an adversary proceeding
An adversary proceeding is a separate lawsuit within your bankruptcy case. It asks the court to rule that repaying your student loans would impose an "undue hardship" on you and your dependents. The Department of Education is named as a defendant, and the Justice Department represents it.
Step 3: You complete the attestation
The attestation is a detailed form you sign under penalty of perjury. It covers:
- Your household, income and assets
- Your monthly expenses
- Your education, work history and health
- Your history of paying, or trying to pay, your loans
Your expenses are compared with standard expense amounts published by the IRS. Accuracy matters: the form is sworn, and the government may ask for documents to support it.
Step 4: The government reviews it
Justice Department attorneys, working with the Department of Education, apply three questions: Can you afford to pay now? Is that likely to change? Have you acted in good faith? (Our post on the three questions explains each one.)
Step 5: The government states its position
The government may recommend full discharge, recommend partial discharge, or decline to support discharge. If it recommends discharge, the parties prepare an agreed judgment for the court.
Step 6: The judge decides
The bankruptcy judge makes the final decision. The government's recommendation carries real weight, but it is the court's ruling that discharges the debt.
How long does it take?
Every case is different. Many cases involving loans held by the Department of Education resolve within several months to about a year after the adversary proceeding is filed.
Talk to us first
The first conversation is free. Call 702-386-8600 to find out whether the attestation process is a fit for your loans.