September 02, 2026 – PRESSADVANTAGE –
Attorney Michael Goldstein has published a guide for Massachusetts consumers examining how recent federal procedural changes affect requests to discharge student loans in Chapter 7 bankruptcy. The guide addresses a revised Justice Department attestation form issued in May 2025 and the loan ownership requirement that determines whether a borrower can use the federal review process at all.
Student loans are not eliminated automatically in a Chapter 7 case the way credit card balances and medical bills are. A borrower generally must file a separate lawsuit inside the bankruptcy case, known as an adversary proceeding, and obtain a court determination that repaying the loans would impose an undue hardship under 11 U.S.C. Section 523(a)(8). The guide describes that requirement as a procedural hurdle rather than a prohibition, noting that the statute provides an exception for undue hardship rather than barring discharge outright.
The framework the government uses dates to November 17, 2022, when the Justice Department, working with the Department of Education, issued guidance directing its attorneys to stipulate to the facts showing undue hardship and to recommend discharge when three conditions are satisfied. The borrower must presently lack the ability to repay, measured by comparing income against necessary living expenses using standardized allowances. That inability must be likely to persist. And the borrower must have acted in good faith toward the loans, which looks to payment history and contact with servicers.
The guide emphasizes that the 2022 guidance did not change the legal standard. Undue hardship remains the statutory requirement, and only Congress can amend it. What the guidance created was a standardized method for the government to decide when it should agree that requirement has been met.
In May 2025 the Justice Department issued a revised version of the borrower attestation form. The three-part framework established in 2022 remained in place. The practical consequence is easy to overlook, because earlier versions of the form from 2022 and 2023 continue to circulate online while only the current version applies. The guidance and the current form are published on the Justice Department Civil Division documents and forms page.
A substantial portion of the guide addresses a threshold question many borrowers never consider. The federal review process reaches only loans held by the Department of Education, meaning Direct Loans along with FFEL Program and Perkins loans the Department holds. Loans held by a guaranty agency or by a private lender fall outside the process entirely, which changes both what must be proven and how the case is likely to proceed. The guide identifies confirming loan ownership as the first practical step in the student loan discharge process, and notes that current loan and servicer information is available to borrowers through their accounts at studentaid.gov.
“Loan ownership determines whether the federal process is available at all, and borrowers frequently assume a loan is Department-held when it is not,” said Attorney Michael Goldstein. “That question comes before any analysis of hardship.”
The attestation itself is a detailed financial declaration signed under penalty of perjury. It covers household size and dependents, sources of income, necessary monthly expenses measured against standardized allowances, employment history, the complete student loan and repayment record, education outcomes including whether the degree was completed, and circumstances affecting future earning capacity such as age, health and disability.
Completing the form does not resolve the debt. The guide describes the attestation as evidence rather than an outcome, used by the Justice Department and the Department of Education to determine what position the government will take in the adversary proceeding.
“The attestation informs the position the government takes, and the bankruptcy judge decides the case,” Goldstein said. “A recommendation from the government carries weight without binding the court.”
Attorney Michael Goldstein is a Massachusetts bankruptcy lawyer who represents consumers in Chapter 7 and Chapter 13 matters and advises small business owners on debt relief, tax workouts and business formation. He holds an Of Counsel role with Phillips Law Offices and maintains an independent Massachusetts practice. He graduated from the Massachusetts School of Law in 2005 and has practiced bankruptcy law for approximately two decades. His firm is a debt relief agency that helps people file for bankruptcy relief under the Bankruptcy Code.
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Attorney Michael Goldstein
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