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House Specials showcases our boldest takes and biggest wins, diving deep into consumer rights and featuring guest pours from fellow champions of consumer advocacy. Come thirsty and ready to explore!
Yes, You Can Discharge Student Loans in Bankruptcy
Here’s What You Need to Know
07/18/25 - For decades, you may’ve heard that student loans are undischargeable in bankruptcy — wrong. Thanks to updated guidance from the Department of Justice (DOJ) and Education (DOE), discharging federal student loans is not only possible but becoming more attainable for borrowers facing true hardship.
📌 1. Bankruptcy Can Clear Student Loans—With Extra Steps
📌 1. Bankruptcy Can Clear Student Loans—With Extra Steps
📌 1. Bankruptcy Can Clear Student Loans—With Extra Steps
Filing Chapter 7 or Chapter 13 bankruptcy doesn’t automatically erase student loans. Borrowers must file an adversary proceeding—a separate legal case within the bankruptcy—demanding the discharge, and proving that repaying the loans would impose “undue hardship”
2. What Is “Undue Hardship”?
📌 1. Bankruptcy Can Clear Student Loans—With Extra Steps
📌 1. Bankruptcy Can Clear Student Loans—With Extra Steps
Courts use one of two tests:
- Brunner Test (most common): Three requirements—(1) you can't maintain a minimal standard of living; (2) hardship likely to persist; (3) you've tried to repay in good faith
- Totality of Circumstances: A more flexible, holistic approach
3. The 2022 DOJ/DOE Guidance: A Game Changer
📌 1. Bankruptcy Can Clear Student Loans—With Extra Steps
3. The 2022 DOJ/DOE Guidance: A Game Changer
Prior to November 2022, outcomes varied widely by judge and jurisdiction. Now, borrowers complete a standardized attestation form detailing income, living expenses, & repayment efforts. The DOJ uses it to make objective, fact-based recommendations to bankruptcy courts
Early data is promising:
- Over 95% of cases using this form receive full or partial discharge
- LegalClarity reports a similar success rate—97%
4. What Borrowers Need to Do
5. Who Should Consider This Option
3. The 2022 DOJ/DOE Guidance: A Game Changer
- File for Chapter 7 or Chapter 13 bankruptcy.
- Begin an adversary proceeding to focus on student loans
- Serve the complaint on your loan servicer, the DOJ, your U.S. Trustee, and district U.S. Attorney
- Submit the attestation form outlining your income, expenses, hardship, and repayment efforts.
- DOJ and DOE will review and recommend to the court; the judge makes the final decision.
5. Who Should Consider This Option
5. Who Should Consider This Option
5. Who Should Consider This Option
- Borrowers with low income, especially if expenses exceed earnings.
- Those with chronic illness, disability, limited job prospects, or prolonged unemployment
- Individuals who’ve tried income-driven repayment or deferment to no avail
6. Challenges & Practical Advice
5. Who Should Consider This Option
5. Who Should Consider This Option
Despite the streamlined process, challenges remain:
- Adversary proceedings can be technical and time-consuming
- Many borrowers can’t afford attorneys, and not all lawyers specialize in student-loan discharge
- Legal aid organizations or attorneys offering payment plans can provide help
✅ Bottom Line for Consumers
✅ Bottom Line for Consumers
✅ Bottom Line for Consumers
If student loan payments are strangling you—leaving you unable to cover basic living costs—the new bankruptcy discharge process offers real hope:
- Not automatic, but legally achievable.
- Standardized, data-driven, and now highly successful.
- Your best option? Consult a bankruptcy attorney, explore legal aid, and gather your financial documents today.
🔗 Further Resources
✅ Bottom Line for Consumers
✅ Bottom Line for Consumers
- Official federal guidance on student loan discharge: Student Loan Discharge Guidance -- Guidance Text
- In-depth breakdown of undue hardship tests: The Brunner Test: Student Loan Forgiveness in Bankruptcy
- FAQs for borrowers trying to discharge loans. Bankruptcy - Student Loan Borrowers Assistance
📣 Ready to Fight Back?
✅ Bottom Line for Consumers
📣 Ready to Fight Back?
Don’t believe the myth that student loans are forever. With today’s new process, discharge may be within reach for those who truly qualify.
Share this article, empower someone in need, and visit The Consumer Bar for smart guides that protect your rights.
📲 Shein's Text Game Just Got Lit...igated
Fast Fashion, Meet Federal Law
07/15/25 - Shein, the TikTok-favorite fashion giant known for $5 crop tops and dangerously fast shipping, is now facing something less trendy: a class action lawsuit over its text marketing practices. According to the lawsuit filed in federal court, Shein allegedly sent marketing texts without consent, even to numbers listed on the National Do-Not-Call Registry—a violation of consumer rights and a clear breach of text marketing laws under the TCPA (Telephone Consumer Protection Act).
🚨 What Did Shein Do?
The plaintiff claims Shein sent unsolicited promotional messages, even after the recipient attempted to opt out. If true, this could violate consumer rights under several important regulations: the TCPA, which prohibits robocalls and marketing texts without prior consent; the FTC Do-Not-Call rules, which bar companies from texting numbers on the registry; and possibly even common decency (we’re still fact-checking that last one). Some messages allegedly continued even after texting 'STOP'—a significant legal red flag in the context of text marketing laws.
📜 What’s the TCPA Again?
👚 Fast Fashion, Slower Litigation?
👚 Fast Fashion, Slower Litigation?
Glad you asked. The Telephone Consumer Protection Act outlines important text marketing laws that marketers must follow, which include:
- Obtaining express written consent before sending promotional texts
- Honoring opt-out requests immediately
- Never contacting numbers on the National Do-Not-Call list
Violations of these laws can cost between $500 to $1,500 per message, depending on how willful the spammy behavior was.
📱 So if Shein has been hitting your phone like it's trying to upsell denim at 3am, you may have rights under consumer rights laws. And make sure to keep those receipts.
👚 Fast Fashion, Slower Litigation?
👚 Fast Fashion, Slower Litigation?
👚 Fast Fashion, Slower Litigation?
This isn’t the first time a major retailer’s text marketing strategy has landed them in court. But as consumer awareness around robocall and spam text laws grows, TCPA class actions are becoming more common—and more costly for businesses. Shein, which has faced criticism for labor practices, knockoff accusations, and data privacy concerns, may be trying to dodge one of its most American trends yet: a nationwide lawsuit served with a side of class certification, highlighting the ongoing battle for consumer rights.
🧾 What You Can Do If You've Been Texted by Shein (or Anyone Else):
🧾 What You Can Do If You've Been Texted by Shein (or Anyone Else):
🧾 What You Can Do If You've Been Texted by Shein (or Anyone Else):
Save the texts and screenshot the timestamps for your records. It's also important to check if your number is listed on the Do-Not-Call Registry, especially in light of current text marketing laws. If you feel your consumer rights have been violated, consider contacting a consumer rights attorney (like the mixologists here at The Consumer Bar).
🥃 Final Sip
🧾 What You Can Do If You've Been Texted by Shein (or Anyone Else):
🧾 What You Can Do If You've Been Texted by Shein (or Anyone Else):
If your text messages resemble a clearance bin more than an effective communication tool, it’s time to make some changes. Text spam isn’t just inconvenient; it could violate text marketing laws and infringe on your consumer rights. The recent Shein lawsuit serves as a reminder that even major brands must adhere to the law.
💬 Want us to review your texts? Slide into Ask the Bartender, and let’s explore if your phone is entitled to a little financial justice, just like our house specials!