In our last post, we spoke a bit about student loans and bankruptcy, particularly the difficulty of having student loan debt discharged in bankruptcy. As we noted, bankruptcy courts will not discharge student loan debt unless a debtor is able to demonstrate that paying of that debt would constitute an undue hardship. Very few debtors are able to successfully do that under current case law, but it is possible that this could change.
Many of our readers may be aware that it is extremely difficult to obtain a discharge of student loans in the bankruptcy process. Under bankruptcy law, a debtor must meet certain income requirements and must demonstrate that the student loan debt poses a substantial hardship for the debtor.