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BANKRUPTCY
A DEBTOR IN A CHAPTER 13 BANKRUPTCY CAN SEEK DISCHARGE OF STUDENT LOANS DUE TO UNDUE HARDSHIP IN ADVANCE OF COMPLETING THE CHAPTER I3 PLAN
FACTS
Cathy Coleman owed over $100,000 in student loans. She filed for Chapter 13 bankruptcy and confirmed a five year plan. Less than a year later she was laid off. She then applied for undue hardship and requested the bankruptcy court to discharge her student loans. It did. (Educational Credit Management v. Coleman, (8-1-08), 9th Cir. USCA, 06-16477).
MORAL
It just goes to prove the debtor can discharge debts that are nondischargeable. However, this bankruptcy was originally filed in 2004 before the new bankruptcy act was in effect. then again with a Democratic President and Democratic Federal Legislature and the state of the economy, who knows, the old bankruptcy law may make a reappearance. THE INFORMATION HEREIN IS NOT LEGAL ADVICE. |
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