Litigation » Judge Calls for Rethinking Student Loan Bankruptcy Standard

Judge Calls for Rethinking Student Loan Bankruptcy Standard

July 20, 2015

Tunnel of $100 dollar bills

Recently some judges and courts have signaled that the rigid bankruptcy standard applied to student loan debt should be reconsidered. The current analysis used to determine the existence of an undue hardship “is too narrow, no longer reflects reality, and should be revised,” Judge Jim D. Pappas recently wrote in a Ninth Circuit Court of Appeals decision, perhaps the sharpest rebuke yet. “It would seem that in this new, different environment, in determining whether repayment of a student loan constitutes an undue hardship, a bankruptcy court should be afforded flexibility to consider all relevant facts about the debtor and the subject loans,” he wrote, but the current analysis, known as the Brunner test, does not allow it.

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