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)