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Student Loans Bankruptcy Code

Patterson Belknap Webb & Tyler LLP

The State of Student Loan Debt in Bankruptcy

On June 30, the Supreme Court ruled that the Biden administration did not have authority to forgive student loans under the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act). Despite this defeat,...more

Troutman Pepper

CFPB Warns Student Loan Servicers About Collecting on Discharged Debt

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On March 16, the Consumer Financial Protection Bureau (CFPB) released a compliance bulletin entitled Unfair Billing and Collection Practices After Bankruptcy Discharges of Certain Student Loan Debts. The compliance bulletin...more

Ballard Spahr LLP

Second Circuit holds inclusion on credit report of student loan debt alleged to have been discharged in bankruptcy did not make...

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The U.S. Court of Appeals for the Second Circuit recently ruled that a plaintiff who alleged that Experian had violated the Fair Credit Reporting Act by including a discharged student loan debt on his credit report had not...more

Ballard Spahr LLP

Justice Department announces new guidance for handling bankruptcy discharge of federal student loans

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In conjunction with efforts to forgive federal student debt for certain borrowers, President Biden’s Justice Department recently announced new guidance for its attorneys to use when deciding whether to recommend that a...more

Nelson Mullins Riley & Scarborough LLP

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

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

Bradley Arant Boult Cummings LLP

Old Myths Die Hard: District Court Reverses Bankruptcy Court’s Discharge of Student Loan Debt Under Brunner

A district court judge recently reversed and remanded a well-known bankruptcy decision discharging a significant student loan debt. In the Southern District of New York, Judge Philip Halpern, reviewing the bankruptcy court’s...more

Kramer Levin Naftalis & Frankel LLP

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

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

BCLP

Senate Considers Bankruptcy Code Changes to Tackle Student Debt Crisis - and to Make Some Colleges Pay for It

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As of May 2021, approximately 45 million Americans owe more than $1.7 trillion in student loan debt. For the arithmetically challenged, that means the average borrower has $38,000 in student loan debt....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

McGlinchey Stafford

What Does The Homaidan Case Change About Private Student Loans In Bankruptcy?

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The non-dischargeability of private student loans in bankruptcy proceedings has long been assumed to be almost absolute, but a July 15, 2021 decision (Homaidan v. Sallie Mae) by the U.S. Court of Appeals for the Second...more

Roetzel & Andress

Huge Win For Private Student Loan Borrowers

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Student loans are notoriously difficult to shed through the bankruptcy process. A person must show that it would impose an "undue hardship" on them to be required to repay the student loans, and the test for proving undue...more

Troutman Pepper

Second Circuit Rules Private Student Loans May Be Discharged in Bankruptcy

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On July 15, the U.S. Court of Appeals for the Second Circuit ruled that private student loans are not explicitly exempt from a debtor’s Chapter 7 bankruptcy discharge....more

Patterson Belknap Webb & Tyler LLP

Maryland Court Discharges Student Debt

As we reported, on June 21, 2021, the U.S. Supreme Court declined to revisit the rigid Brunner standard for determining “undue hardship” capable of discharging student debt.  The same day, United States Bankruptcy Judge...more

Patterson Belknap Webb & Tyler LLP

That’s a Brunner, Man. Supreme Court Declines to Revisit Overly Rigid Standard for Discharge of Student Loans in Bankruptcy 

On Monday, the United States Supreme Court denied Thelma McCoy’s petition for a writ of certiorari to the United States Court of Appeals for the Fifth Circuit, passing up a golden opportunity to bring uniformity to the...more

Fox Rothschild LLP

Second Circuit Stands By Brunner Test For Discharge Of Student Loan Debt

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When the Bankruptcy Code was first enacted in 1978, student loan debt could be discharged either after the passage of five years since the repayment obligation began, or if repayment would impose an undue hardship on the...more

Troutman Pepper

2020 Consumer Financial Services Year in Review & A Look Ahead

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2020 was a transformative year for the consumer financial services world. As we navigate an unprecedented volume of industry regulation, Troutman Pepper is uniquely positioned to help its clients find successful resolutions...more

Tarter Krinsky & Drogin LLP

Bankruptcy Basics and Recent Developments

Scott Markowitz, co-chair of the Bankruptcy and Corporate Restructuring Group, and Rich Schoenstein, host and Litigation partner, talk Bankruptcy Basics and Recent Developments on the latest episode of Law Brief. Scott and...more

Hinshaw & Culbertson LLP

An Emerging Trend in Favor of Student Loan Discharges in Bankruptcy

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

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

First Circuit Holds that Parents’ Tuition Payments for Adult Children Are Fraudulent Transfers

Recently, the First Circuit held that a parent’s tuition payments on behalf of an adult child do not benefit the parent’s bankruptcy estate, and a Chapter 7 trustee may therefore claw the payments back as fraudulent...more

Womble Bond Dickinson

A Dream or a Nightmare? Who pays in a world without student loans?

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Anyone who hasn’t heard about the “student loan crisis” in the U.S. hasn’t been paying attention. U.S. student loan debt is estimated to range from between $1.2 and $1.6 trillion with more than seven million borrowers in...more

Bradley Arant Boult Cummings LLP

Student Loans in Bankruptcy: What’s on the Horizon?

Federal law has long excepted student loans from discharge in bankruptcy in all but the rarest instances, recognizing the problems (and costs) associated with allowing borrowers to wipe out defaulted debts through a...more

Bradley Arant Boult Cummings LLP

Take It to the Limit: Increase in Chapter 13 Debt Limits

Individuals have several options when filing bankruptcy. Chapter 13 is often preferred for individuals with regular income who wish to keep their homes and other secured assets. In a Chapter 13 filing, the court will approve...more

Balch & Bingham LLP

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

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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

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