Consumer Bankruptcy, Bankruptcy Code, Dischargeable Debts

High Court Bankruptcy Ruling Is a Warning to Joint Obligors

Troutman Pepper on 6/26/2023

In a unanimous decision, the U.S. Supreme Court held that Section 523(a)(2)(A) of the U.S. Bankruptcy Code precludes a debtor from discharging a debt obtained by fraud, regardless of the debtor's own culpability. ...more

Innocence Is No Defense: Debt Obtained by Fraud Is Nondischargable

Miller Canfield on 2/24/2023

A debt “for money, property, services, or an extension [. . .] of credit, to the extent obtained by [. . .] actual fraud,” is not dischargeable in a chapter 7 bankruptcy case. Courts have questioned whether this applied if...more

Does the Bankruptcy Code Allow for Partial Discharge of Student Loans?

Nelson Mullins Riley & Scarborough LLP on 3/3/2022

Section 523(a)(8) of the Bankruptcy Code excepts from discharge in bankruptcy certain student loans, “unless excepting such debt from discharge under this paragraph would impose an undue hardship.” By its terms, section...more

Second Circuit Affirms That Some Private Student Loans Are Dischargeable in Bankruptcy

Kramer Levin Naftalis & Frankel LLP on 11/18/2021

In Hilal K. Homaidan v. Sallie Mae, Inc., Navient Solutions, LLC, Navient Credit Finance Corporation, Case No. 20-1981 (2d Cir. 2021), the Second Circuit affirmed the opinion of the U.S. Bankruptcy Court for the Eastern...more

Second Circuit Holds That Certain Private Student Loans May Be Dischargeable Under Section 523(a)(8)(A)(ii)

Jones Day on 8/20/2021

On July 15, 2021, a three-judge panel of the U.S. Court of Appeals for the Second Circuit held in Homaidan v. Sallie Mae, Inc., et al. that the private student loans at issue were not subject to the discharge exemption in...more

Not All Student Loans Are Created Equal - Some May Be Dischargeable in Bankruptcy

Miller Canfield on 8/9/2021

On July 15, 2021, in the Homaidan opinion, the Second Circuit joined the Fifth and Tenth Circuits in deciding that certain student loans are dischargeable in bankruptcy. These three opinions are very important for the student...more

Top 10 Changes to Consumer Bankruptcy Proposed in the Consumer Bankruptcy Reform Act of 2020

Bradley Arant Boult Cummings LLP on 12/15/2020

On December 9, 2020, Congressional Democrats, including Elizabeth Warren (D-Mass.) and Jerrold Nadler (D-N.Y.), proposed sweeping legislation that would overhaul consumer bankruptcy law. The proposed changes generally make it...more

The Discharge in Bankruptcy - Open Avenues for Consumer Creditors

Spilman Thomas & Battle, PLLC on 8/6/2020

In a typical consumer bankruptcy, a debtor seeks the benefit of two concepts. First, the debtor seeks the breathing room afforded that debtor by the automatic stay. Second, the debtor seeks to discharge all debt obligations...more

An Emerging Trend in Favor of Student Loan Discharges in Bankruptcy

Hinshaw & Culbertson LLP on 2/11/2020

We recently reported on a Fifth Circuit decision that ruled some private, for-profit student loans are dischargeable in bankruptcy without a showing of undue hardship—something unusual and inconsistent with the widely-held...more

Bankruptcy Court Discharges Student Loan Debt

Ballard Spahr LLP on 1/22/2020

On January 7, 2020, Chief United States Bankruptcy Judge Cecilia G. Morris of the United States Bankruptcy Court for the Southern District of New York issued a notable opinion in the case of Rosenberg v. N.Y. State Higher...more

Bankruptcy Court Rejects Brunner “Myth” and Discharges $220K in Student Loan Debt

Bradley Arant Boult Cummings LLP on 1/16/2020

Chief Bankruptcy Judge Cecelia Morris in the Bankruptcy Court for the Southern District recently reinterpreted Brunner’s “undue hardship” test and discharged over $220,000 in student loan debt. This opinion reflects a marked...more

In re: Muhs “Willful and Malicious” Does Not Mean “Willful and Malicious”

Rosenberg Martin Greenberg LLP on 5/30/2019

In In re Muhs, the United States Court of Appeals for the Fourth Circuit was called upon to decide whether “the meaning of ‘willful and malicious’ under Alaska law is identical to the meaning of ‘willful and malicious’ under...more

Will My Judgment Get Discharged in Bankruptcy?

Ward and Smith, P.A. on 5/20/2019

Bankruptcy is meant to provide a fresh start for the honest but unfortunate debtor. A debtor who files Chapter 7 does so with the presumption that all his or her debts will be forgiven or "discharged." But what about the...more

Supreme Court To Decide Important Bankruptcy Case

Amundsen Davis LLC on 4/30/2018

The United States Supreme Court is poised to decide whether a mis-statement about a single asset must be in writing in order to give rise to a non-dischargeable debt for fraud. Scott Appling supposedly orally lied to his...more

Texas Bankruptcy Judge Holds that Not Every Loan Related to Education is a Nondischargeable Student Loan in Purported Class Action

Balch & Bingham LLP on 4/20/2018

Bankruptcy Code Section 523(a)(8) generally prohibits a discharge of student loan debt, unless the student debtor can prove that paying it back would be an undue hardship—often a high bar. That does not stop student debtors...more

Awkward: Old Friend From Church Blocks Discharge of Student Loan Debt

BCLP on 4/3/2018

Providing an exception to the axiom that no good deed goes unpunished (a wonderful phrase courtesy of Clare Booth Luce, author, Ambassador, speaker, and a model for our times even thirty years after her death), a Texas...more

Second Circuit, on Truncated Record, Holds Dispute Implicating Core Bankruptcy Proceeding Non-Arbitrable

Ballard Spahr LLP on 3/27/2018

In a recent decision pitting the Bankruptcy Code against the Federal Arbitration Act (FAA), the U.S. Court of Appeals for the Second Circuit held that a creditor could not compel arbitration of a debtor's class action claims...more

Burr Alert: Lenders Beware: 11th Circuit holds borrower’s false oral statement regarding single asset does not provide basis for...

Burr & Forman on 3/23/2017

Section 523(a)(2) of the Bankruptcy Code is clear that a debtor can discharge a debt for money obtained by a false statement respecting the debtor’s financial condition unless that statement is in writing. What hasnot been...more

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