QUESTION: What is the Brunner test?

ANSWER: The Brunner undue hardship test is the exclusive method used in Oregon to qualify for the undue hardship exception.

Marie Brunner filed bankruptcy in 1983. She asked the court to wipe out her student loans. The judge granted her request because she couldn’t find work in New York City. The student loan company appealed. She couldn’t afford to hire an attorney to represent her. She lost twice on appeal. The three part test used in her case came to be known as the Brunner test.

Brunner Test in Oregon

In 1987 the Ninth Circuit (which includes Oregon) adopted the Brunner test as the only way to wipe out student loans.

In order to qualify, you must prove: (1) you cannot, based on your current income and expenses, maintain a minimal standard of living for yourself or your dependents if required to repay your student loans, (2) additional circumstances exist which make it likely that your state of affairs satisfying the first prong will persist for a significant portion of the repayment period, and (3) you have made good faith efforts to repay your student loans.

On Appeal

In October 2015, a Wisconsin borrower filed an appeal with the United States Supreme Court challenging the Brunner test. The borrower argued the test was unfair and asked the court to adopt a less rigid ‘totality of the circumstances’ test. As of the date of this post the Supreme Court has not agreed to hear the appeal.

Until the Ninth Circuit or Supreme Court rules otherwise, Brunner is the exclusive test used by Oregon bankruptcy courts to determine whether an undue hardship exists.