Wiping out student loans in bankruptcy is rare because the law requires a heavy burden:  Proof that repayment creates an “undue hardship” on the consumer.  How rare?  When a contested hardship discharge was granted in St. Louis late last year, most practitioners could not remember the last time it had happened.
To put this in perspective, [...]

Popularity: 14% [?]

Was that student loan discharged in bankruptcy, or wasn’t it? Two recent decisions leave the answer to that question in doubt. Hoxie v. Educational Credit Management Corporation (US Dist. SD California, November 13, 2006) and Mersmann v Educational Management Credit Corporation (US App 10th Circuit, September 24, 2007) threaten the financial security [...]

Popularity: 37% [?]

Section 523(a)(8) of the bankruptcy law states that student loans cannot be discharged, unless payment of the student loans would impose an undue hardship upon the debtor or his dependents.  This section has been part of the bankruptcy law for over twenty-five years.  It was also amended in 2005 to include private student loans.
However, not all [...]

Popularity: 22% [?]

It is well known that student loans can’t usually be discharged in a bankruptcy case. What is not well known is why, and what you might be able to do about it.
Section 523(a)(8) of the bankruptcy code says that student loans cannot be discharged in either chapter 7 or chapter 13, unless repaying the student [...]

Popularity: 27% [?]

Student loans are hard to get rid of; even in bankruptcy. Congress only allows a bankruptcy court to discharge student loan debt when not doing so causes undue hardship for the debtor or the dependents of the debtor. The discharge rule for student loans is short and is set out in 11 USC §523(a)(8). Undue [...]

Popularity: 43% [?]

While paying a student loan outside a Chapter 13 plan may be an option in bankruptcy, student loan debt may help an above median debtor pass the means test and file a Chapter 7.   A monthly student loan payment is a valid additional circumstance allowing a debtor with above-median income to file for Chapter 7 [...]

Popularity: 33% [?]

If you are considering bankruptcy and happen to have the proceeds of your recent student loan sitting in your bank account, what happens to this money? Is it subject to being taken by the trustee to pay your creditors? If so, your education plans could be derailed: you could be unable to pay [...]

Popularity: 20% [?]

Student loans made before 1998 were given new life by Congress when it eliminated the seven year discharge rule in 1998. The United States Court of Appeals for the 9th Circuit recently affirmed the right of Congress to modify discharge rules after the loan was taken out.
Prior to the change in 1998, a student [...]

Popularity: 45% [?]