Home > attorneys > Holy Rusted Metal Batman! Discharge of student loans without undue hardship claim?

Holy Rusted Metal Batman! Discharge of student loans without undue hardship claim?

Indeed it’s true.  For all of you who owe big time for that fancy diploma of yours I suggest you read up.  This part March, the US Supreme Court unanimously ruled in the case of Student Aid Funds, Inc. v. Espinosa that even if a student hasn’t filed a claim of “undue hardship” a bankruptcy court can discharge a student loan debt.  This endorses the Ninth Circuit of the US Court of appeals decision which stated that a student loan can be discharge with Chapter 13 if the notice of the plain is received by the creditor without objection.  Justice Clarence of the courts stated the following.

“Where, as here, a party is notified of a plan’s contents and fails to object to confirmation of the plan before the time for appeal expires, that party has been afforded a full and fair opportunity to litigate, and the party’s failure to avail itself of that opportunity will not justify … relief. We thus agree with the Court of Appeals that the Bankruptcy Court’s confirmation order is not void.”
This new ruling clearly puts the US Supreme Court and the Ninth Circuit on the same page.  In recent months the Supreme Court has been faced with several issues in bankruptcy such as Hamiltion, Chapter 13 Trustee v. Lanning on the topic of calculating debtor’s.  The court ruled in early March in the case of Milavetz, Gallop & Milavetz v. US that lawyers should not be considered as debt relief agencies.  This is clearly stated under the Bankruptcy Abuse Prevention and Consumer Protection Act.

Look this isn’t as simple as it sound and every case has its own details.  If you think this may affect your loan situation reach out to a local attorney for guidance.

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Categories: attorneys
  1. The whole opinion
    April 1, 2010 at 10:56 pm

    Not so fast – the Court ALSO said that what the court, the debtor and the debtor’s attorney did was WRONG because it violated the Code & Rules and that Rule 11 sanctions are available to the creditor to stop similar attempts to game the system.

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