What is undue hardship in family law?
Table of Contents
What is undue hardship in family law?
The undue hardship provision recognizes that, sometimes, a parent or child can suffer undue hardship if the parent pays the table amount, or the table amount plus special expenses. The parent claiming undue hardship has to show that his or her household standard of living is lower than that of the other parent.
How do you prove undue hardship?
Under the Bankruptcy Code, there’s no one way to prove undue hardship. If there was, I imagine a lot more people would be seeking a bankruptcy discharge of their student loan debt. But since that’s not how it works, to win your case, you have to do the best job you can to pass the hardship test your court uses.
What is the Brunner test?
The Brunner test is a test that many bankruptcy judges use to decide if you can discharge student loans in bankruptcy. The test asks three questions: Based on your current income, can you maintain a minimal standard of living for you and your dependents while repaying your student loan debt?
Can student loans be discharged?
Student loans are difficult, but not impossible, to discharge in bankruptcy. To do so, you must show that payment of the debt “will impose an undue hardship on you and your dependents.” Courts use different tests to evaluate whether a particular borrower has shown an undue hardship.
What is undue hardship for student loans?
Undue hardship is defined as the inability (now or in the future) to repay the student loan debt and still maintain a minimal standard of living. An example of this might be a person who becomes sick or injured to the point at which he or she is no longer able to perform any wage-earning job, now or in the future.
How can I get my school loans forgiven?
PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. Learn more about the PSLF Program to see whether you might qualify.
Do student loans prevent you from buying a house?
Student loan payments make saving for a down payment more difficult and mortgage payments harder to handle once you’re a homeowner. Student loan debt may increase your debt-to-income ratio, affecting your ability to qualify for a mortgage or the rate you are able to get.
Can I buy a house with debt?
Yes, it is absolutely possible to buy a house with credit card debt. And by lowering your debt-to-income ratio before you apply for a loan, you may qualify for a better interest rate, too.
How much is too much house debt?
If your DTI is higher than 43%, you’ll have a hard time getting a mortgage. Most lenders say a DTI of 36% is acceptable, but they want to loan you money so they’re willing to cut some slack. Many financial advisors say a DTI higher than 35% means you are carrying too much debt.
