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Exactly about Scholarly Commons IIT Chicago-Kent College of Law

Wednesday, March 11th, 2020

Exactly about Scholarly Commons IIT Chicago-Kent College of Law

Seventh Circuit Review

Once the wage-market stays stagnant, and pupil indebtedness will continue to increase, numerous graduates battle to balance their education loan financial obligation. Generally speaking, when a debtor files for bankruptcy, her education loan debt just isn’t dischargeable. Nevertheless, under 11 U.S.C. § 523(a)(8), debtors can discharge their student education loans through bankruptcy when they can show that keeping those education loan debts would impose a hardship that is”undue upon on their own. Unfortuitously, Congress failed to define what “undue hardship” implied when enacting the bankruptcy rule. Courts have since been left to interpret this is of “undue difficulty, ” and several achieve this in various means.

Over the different circuits, “undue difficulty” is assessed similarly—but the differences in definitions can often be outcome determinative. While unusual, a jurisdiction having 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 considering that the united states of america Constitution requires consistent federal bankruptcy rules to be reproduced through the entire states. (more…)