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Consumer Bankruptcy › Dischargeable Debts

Consumer bankruptcy is a process to reduce or eliminate personal as opposed to business debts. Consumer bankruptcies can be filed under either Chapter 7 or Chapter 13 of the bankruptcy code.  Debtors are... more +
Consumer bankruptcy is a process to reduce or eliminate personal as opposed to business debts. Consumer bankruptcies can be filed under either Chapter 7 or Chapter 13 of the bankruptcy code.  Debtors are eligible for Chapter 7 or Chapter 13 depending on the nature of their debts and assets. less -
Goodwin

CFPB Files Suit Against Student Loan Servicer

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On May 31, 2024, the CFPB announced that it had filed suit against a Pennsylvania-based student loan servicer for engaging in allegedly unfair, deceptive and abusive acts or practices in violation of the CFPA, 12 U.S.C. §§...more

Orrick, Herrington & Sutcliffe LLP

DOJ and DOE share success after first year of student loan bankruptcy discharge process

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On November 16, the DOJ and DOE announced a successful first year of their new student loan bankruptcy discharge process during 2022. The discharge process extinguishes a borrower’s obligation to pay back either some or all...more

Troutman Pepper

High Court Bankruptcy Ruling Is a Warning to Joint Obligors

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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

Orrick, Herrington & Sutcliffe LLP

CFPB scrutinizes discharged private student loan billing and collection practices

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On March 16, the CFPB released a compliance bulletin discussing student loan servicers’ practice of collecting on private student loans discharged in bankruptcy. ...more

Miller Canfield

Innocence Is No Defense: Debt Obtained by Fraud Is Nondischargable

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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

Troutman Pepper

DOJ Releases Guidance for Discharging Federal Student Loan Debt in Bankruptcy

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The U.S. Department of Justice (DOJ) has released guidance to its attorneys regarding requests to discharge student loans in bankruptcy cases. The 16-page memorandum developed in coordination with the Department of Education...more

Orrick, Herrington & Sutcliffe LLP

2nd Circuit affirms dismissal in FCRA suit

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On January 4, the U.S. Court of Appeals for the Second Circuit affirmed a district court’s decision to grant summary judgment for a credit reporting agency (defendant) in a suit alleging FCRA violations. ...more

Troutman Pepper

CFPB Releases Blog Post on the Dischargeability of Private Student Loans in Bankruptcy

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On April 12, the Consumer Financial Protection Bureau (CFPB) released a blog post titled “Busting myths about bankruptcy and private student loans.” In the blog post, the CFPB argues that certain private education loans can...more

Nelson Mullins Riley & Scarborough LLP

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

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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

Kramer Levin Naftalis & Frankel LLP

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

Kramer Levin Naftalis & Frankel LLP on

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

Epiq

The Future of Student Loans and Bankruptcy – Is There a Bubble Waiting to Burst?

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In March 2021, the U.S. Department of Education noted that student loan borrowers owed $1.6 trillion federal and private loans. For many, loans are the only option to attend a U.S. university or college for undergraduate,...more

Jones Day

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

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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

Miller Canfield

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

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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

Bradley Arant Boult Cummings LLP

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

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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

Troutman Pepper

Tenth Circuit Affirms Order Allowing Discharge of Private Student Loans

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On August 31, 2020, the Tenth Circuit affirmed the United States Bankruptcy Court for the District of Colorado’s holding that certain student loans not guaranteed by a governmental unit may be discharged in bankruptcy....more

Spilman Thomas & Battle, PLLC

All Consuming - Financial Litigation Insights: Issue 4, August 2020

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Welcome! Welcome to August’s issue of All Consuming. This month, we are taking a deep dive into discharges in bankruptcy and then reviewing several top news stories in the world of consumer finance. We hope you find value...more

Spilman Thomas & Battle, PLLC

The Discharge in Bankruptcy - Open Avenues for Consumer Creditors

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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

Ballard Spahr LLP

Appeal Filed From Bankruptcy Court’s Decision Granting Discharge of Student Loan Debt

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Education Credit Management Corporation (“ECMC”), the guarantor of the student loan debt ruled dischargeable last month by the Chief Judge of the United States Bankruptcy Court for the Southern District of New York, is...more

Hinshaw & Culbertson LLP

An Emerging Trend in Favor of Student Loan Discharges in Bankruptcy

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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

Ballard Spahr LLP

Bankruptcy Court Discharges Student Loan Debt

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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

Bradley Arant Boult Cummings LLP

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

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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

Bradley Arant Boult Cummings LLP

5th Circuit Joins the Growing Crowd Holding that Private Student Loans May be Dischargeable in Bankruptcy

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The Fifth Circuit’s recent decision in Crocker v. Navient Solutions is a stark reminder to for-profit student lenders and servicers that bankruptcy caselaw continues to evolve relating to discharge. In Crocker, the Fifth...more

Carlton Fields

Real Property, Financial Services, & Title Insurance Update: Week Ending October 4, 2019

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Real Property Update - Foreclosure / Bankruptcy / Surrender: borrower cannot challenge judgment of foreclosure entered upon judicial notice of his statement of intention to surrender the property and order of discharge...more

Carlton Fields

Financial Services & Title Insurance Update: Week Ending October 11, 2019

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Financial Services Update - Title Insurance Coverage: where an accurate survey would have shown that seller had abandoned access and parking easement, which had been built upon by a neighbor, title insurer had no duty to...more

Carlton Fields

Court Concludes That Bankruptcy Discharge Does Not Affect Arbitration Clause

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The Eastern District of Pennsylvania recently granted a creditor’s request to compel arbitration over a plaintiff’s argument that the arbitration agreement he had signed was void as a result of a bankruptcy court discharging...more

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