Seventh Circuit Review

Once the wage-market continues to be stagnant, and pupil indebtedness continues to increase, numerous graduates find it difficult to balance their education loan financial obligation. Generally speaking, each time a debtor files for bankruptcy, her education loan financial obligation is certainly not dischargeable. But, under 11 U.S.C. § 523(a)(8), debtors can discharge their student education loans through bankruptcy when they can show that keeping those student loan debts would impose a hardship that is»undue upon on their own. Regrettably, Congress would not define what «undue hardship» suggested when enacting the bankruptcy rule. Courts have actually since been left to interpret this is of «undue difficulty, » and many achieve this in numerous means.

Over the different circuits, “undue difficulty” is assessed similarly—but the differences in definitions can often be determinative that is outcome. While unusual, a jurisdiction using a “totality-of-the-circumstances” way of undue difficulty may discharge a debtor’s student education loans whenever an alternative jurisdiction employing a far more rigid test wouldn’t normally. This really is a issue since the united states of america Constitution requires consistent bankruptcy that is federal to be used through the states. Continue reading →