Exactly about Scholarly Commons IIT Chicago-Kent College of Law

Seventh Circuit Review

Because the wage-market continues to be stagnant, and pupil indebtedness will continue to increase, numerous graduates find it difficult to balance their education loan financial obligation. Generally, when a debtor files for bankruptcy, her education loan financial obligation is certainly not dischargeable. Nevertheless, under 11 U.S.C. § 523(a)(8), debtors can discharge their figuratively speaking through bankruptcy should they can prove that keeping those education loan debts would impose a hardship that is”undue upon by themselves. Unfortuitously, Congress failed to undue define what hardship” implied when enacting the bankruptcy rule. Courts have actually since been left to interpret this is of “undue difficulty, ” and several achieve this in various methods.

Throughout the different circuits, “undue difficulty” is examined similarly—but the differences in definitions can often be outcome determinative. While uncommon, a jurisdiction employing a “totality-of-the-circumstances” way of undue difficulty may discharge a debtor’s student education loans whenever a different sort of jurisdiction employing an even more rigid test wouldn’t normally.Read More