This is good news to those who owed huge student loans and could not barely pay them due to insufficient income. The Ninth Circuit Court of Appeals held that student loans are dischargeable provided certain conditions are met. In part the Court said: "Student loan obligations are presumptively nondischargeable in bankruptcy absent a showing of “undue hardship.” 11 U.S.C. § 523(a)(8). To determine if a debtor has shown undue hardship, we follow the three-part test from Brunner. See In re Pena, 155 F.3d at 1111–12. Under Brunner, the debtor must prove that: (1) he cannot maintain, based on current income and expenses, a “minimal” standard of living for himself and his dependents if required to repay the loans; (2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period; and (3) the debtor has made good faith efforts to repay the loans. Educ. Credit Mgmt. Corp. v. Mason (In re Mason), 464 F.3d 878, 882 (9th Cir. 2006). “[T]he burden of proving undue hardship is on the debtor, and the debtor must prove all three elements before discharge can be granted.” Rifino v. United States (In re Rifino), 245 F.3d 1083, 1087–88 (9th Cir. 2001)."
Posted on: Thu, 11 Jul 2013 18:25:05 +0000
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