Seventh Circuit Review

Due to the fact wage-market stays stagnant, and pupil indebtedness continues to increase, numerous graduates battle 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. Nevertheless, under 11 U.S.C. § 523(a)(8), debtors can discharge their student education loans through bankruptcy should they can be that keeping those education loan debts would impose a «undue difficulty» upon on their own. Regrettably, Congress failed to define what «undue hardship» implied when enacting the bankruptcy code. Courts have actually since been left to interpret this is of «undue difficulty, » and several do this in numerous methods.

Over the various circuits, “undue difficulty” is assessed similarly—but the differences in definitions can often be determinative that is outcome. While uncommon, a jurisdiction employing a “totality-of-the-circumstances” way of undue difficulty may discharge a debtor’s student education loans when a unique jurisdiction employing an even more rigid test wouldn’t normally. […]