Seventh Circuit Review
Since the wage-market stays stagnant, and pupil indebtedness will continue to increase, many graduates find it difficult to balance their student loan financial obligation. Generally speaking, whenever 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 figuratively speaking through bankruptcy when they can show that keeping those education loan debts would impose a hardship that is”undue upon on their own. Regrettably, Congress would not undue define what hardship” implied when enacting the bankruptcy rule. Courts have actually since been left to interpret this is of “undue difficulty, ” and several do this in various means.
Throughout the various circuits, “undue difficulty” is assessed similarly—but the differences in definitions can 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 a new jurisdiction employing an even more rigid test will never.