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A Judge Just Wiped Out This Man’s $221,000 In Pupil Debt

Dienstag, Februar 25th, 2020

A Judge Just Wiped Out This Man’s $221,000 In Pupil Debt

A bankruptcy that is recent choice discharged $221,000 in education loan financial obligation.

An innovative new York bankruptcy judge ordered that a man’s $221,000 in figuratively speaking be discharged — a development that is potentially significant education loan bankruptcy jurisprudence.

It’s very difficult, but not entirely impossible, for borrowers to discharge student education loans in bankruptcy. The federal bankruptcy rule treats pupil loans differently off their kinds of unsecured debt (such as for instance credit debt or medical financial obligation). So that you can discharge their figuratively speaking in bankruptcy, education loan borrowers must show they own an “undue difficulty” that could avoid them from repaying their student loans.

The expression “undue hardship” is certainly not defined by statute, so federal judges have actually developed tests and requirements to find out whether a borrower’s monetary circumstances warrant a release. (mehr …)