Expert: Mark J. Markus- California Bankruptcy Attorney - 4/13/2009

Question
I have a number of private student loans.  I now live in the UK.  Because the exchange rate declined with the change in economy, my student loans leave me near broke every month.  Is it possible to go bankrupt in spite of these being private student loans?  If so, how can I do this while I live in the UK & cannot afford air fare to get to the US?

Answer
Student loans are only dischargeable if you can prove, after trial in a bankruptcy case, undue hardship.   The criteria for undue hardship varies from jurisdiction to jurisdiction, but is difficult to prove.  To see what is required in the Ninth Circuit, visit http://www.bklaw.com/chapter7/student_loans.html

Most courts require you to at least appear for the Trustee's meeting in a Chapter 7 case.  Moreover, it may be difficult for you to testify and do everything you need to do in a litigation from overseas, but I suppose it's possible, but there would be extra costs (for example if the student loan attorneys have to take your deposition overseas).

The real question is why do you need to file if you're living in a foreign country now?   I would examine whether or not the US creditors can seek collection against your assets in the UK first before doing anything else.