Bankruptcy of Your Student Loans

Bankruptcy of Your Student Loans

Sunday, December 27, 2015


The student loan situation is on the verge of a catastrophic collapse!  At no time in history has there been anything that even comes close the amount of "unsecured" money borrowed by the public; the student loan crisis is rapidly approaching $1.3 Trillion Dollars!

Everyone has borrowed money.  Even growing up you asked your parents or your friends to lend you some money with the promise to pay them back.  Most parents are smart enough to know that they probably won't see that money again.  Your friends tend to think that you will be a good enough person to repay the money they loaned you, as they probably are thinking that if they lent you some cash when you asked, perhaps when they need money, you will re-pay the favor?

As an adult, you may find the need to borrow money from someone besides mom and dad or the kid you shared a locker with at school.  In high school you might have found the need to work to earn some extra spending money, because, well... because mom and dad's weekly allowances just weren't meeting the need?  

Having a job is great, your'e getting some experience and "learning some responsibility" as they say, but having a car to get to and from work and to go other places would be the ultimate!  So you head down to the local used car lot and find that little honey and "your 1st car".

The dealer makes it sound so great, and tells you that you can purchase your baby with no money down and the payments will be affordable.  Besides you have a job, and this will prove how responsible you can be; won't your parents be "so" proud?  The process only takes a short while, sign a few papers, and viola you have the keys and your'e on the road!

Borrowing money to pay for your 1st car was simple and exciting.  The dealer said that the title to the car will held as "collateral" on the loan as security in case you are unable to make the required payments.  No biggie, you plan on making the payments and making them on time, so no worries about that.  Besides, you plan to work more and even hope to trade that car in for a newer one in the near future.  And listen, if you can't pay it off, they will just take the car back and sell it to someone else.

When we talk about lending or borrowing money we use the term credit and debit. Credit generally is the term associated with where or who the money is coming from. A creditor is the person or entity that is doing the lending. As the one borrowing, you are named as the debtor.  And as you pay on the borrowed money, the payments are considered debits to your account balance; thus the term "debit".  If you have a debit card, you know that the money is instantly paid out of a bank account, usually a checking account that you have funds in.

There are several types of credit and it may help to try and define them. For example you may hear the term "Consumer Credit"?  Well basically consumer credit is the credit (or should we say the ability to purchase or pay) used by consumers to purchase non-investment goods or services that are consumed and whose value depreciates quickly" 

Non-investment consumable goods are things like food, clothing, entertainment, cell phones, your internet service, and other short-life items you buy on a regular basis.  You may use a credit card to make these kinds of purchases, and that type of buying using credit is referred to as "revolving credit", because for a lack of a better explanation, it seems to continue to happen repeatedly on a very short cycle.

Besides revolving credit there is also what is called "Non-revolving Consumer Credit". Non-revolving consumer credit includes car loans and student loans.  In 2014 is was reported that non-revolving consumer debt amounted to $2.4 Trillion Dollars. As stated in the first paragraph, student loans account for $1.3 Trillion Dollars, nearly half of all of the non-revolving consumer credit debts outstanding.

The total of all Consumer Debt for both the Revolving and Non Revolving Consumer Credit debt in America is reported to be a staggering $3.3 Trillion.  Again, the student loans owed are a full one-third of that total.  Remember this... car loans are secured by a title, while student loans are fully unsecured.

Now there is another segment of the credit business which also needs a quick glance; the home and commercial mortgage market.  Purchases of real estate like homes, condos, and commercial properties all fall into the mortgage business.  A mortgage is simply the loan of money to purchase a property where the lender holds title to the property until the mortgage (or loan) is paid off. In other words, the property is the borrower's collateral and the property "secures" the loan.  If the buyer fails to make the payments, the lender forecloses on the property and takes it back or re-sells the property, much the same as the car dealer would do.

The total money in the mortgage marketplace is also very significant, however borrowing in the mortgage business has seen a slight reduction recently in total dollars being borrowed. Mortgages were reported at the end of 2014 to be at $13.43 Trillion Dollars and this secured debt total has actually come down from a 2008 all-time high of $14.72 Trillion.  Compare this to the increase reported in the total student loan debt, which continues to climb upward.

So what about "unsecured debts"?  Student loans are essentially categorized as unsecured debt. Meaning there is nothing tangible securing the loan and the lender is loaning the money on the promise to pay only.  Back when student loans first became the norm, the U.S. Government enlisted the help of banks and financial institutions to help students get a college education by offering direct loans to students and providing the money to the banks. 

These Government programs included "grants" and loans funded by Congress in the form of Education Bills and establishment of programs like the Perkins Loan Program, and the Federal Direct Student Loan Program (now re-named the William D. Ford Federal Direct Loan Program) and a host of other programs including Pell Grants, Parent Loans, etc, etc.

Once the Federal Government realized the scope of the size and the complexity of the monster they created, the Department of Education sought help to manage and administer the student loan program.  Initially the responsibility to process education loans and track student debtors and money lent fell upon the individual colleges and universities, who themselves were ill prepared to become lenders, bank managers and accountants overnight.  Nearly overnight another government monster had been created.

Overwhelmed with those tasks, the schools quickly opened the business up to outside enterprises that operated as "servicing agencies" under rigid government rules and regulations.  Agencies who then hired thousands of people and yet while operating under the banner of non-profits, received millions and millions of dollars of taxpayer money to do the bookkeeping for the U.S. Department of Education.  Today the monster is out of control.

The most frightening aspect of all of this, is that no one is doing anything to reign in the beast. All the Federal Government has done is to continue to loan money in larger and larger amounts.  There are no credit checks, no background checks, no attempts made to assess the ability of the borrower to be able to pay off the loans, and yes, no collateral required.

The number of student loans increased nearly 85% since the 2008 recession, and the estimate is that over 40 million people owe student loans.  While a report in USA Today claimed that about 39% of those loans are in deferment status and the other 61% are in repayment, I seriously question those statistics as they fail to mention the percentage of loans that are in default!  In fact checking the internet I found the default rate to be stated at nearly 14%.  

Again, I personally believe those numbers are not the facts.  I tend to believe that the Department of Education is deliberately reporting false information in an attempt to hide the truth, that the student loan crisis is a lot bigger than the congress and the public is being told!  One only has to do some simple research - and while you are at it include a search on how many students are going through bankruptcy to discharge their loans by way of an Adversary Proceeding.  There are thousands of cases under the Undue Hardship Clause, 11 USC §523(a)(8), and hundreds of thousands of dollars of student debt being discharged.

What it amounts to is the government is gambling with taxpayer money, betting on the future ability of the borrower to be gainfully employed and re-pay thousands and tens of thousands of dollars once they graduate.  What they have failed to do is have any tangible jobs waiting!

I recently read an article where the by-line was "It's the Economy Stupid", which is a phrase attributed to former President Bill Clinton during the 1992 presidential campaign.  Today's economy is in my humble opinion, on the verge of a total collapse. How in the world can this nation continue to go down the path it is on without taming the debt monsters?  

The recent passage of the debt ceiling bill has America now at $18 trillion dollars of "unsecured debt" to the world banking federations; essentially the Federal Reserve which is as many fail to know NOT a government banking institute, but a privately funded and operated bank owned by the rich and elite of the world.  The Federal Reserve basically runs the printing press at the U.S. Treasury and prints money like there is no end to it.

Well, there is an END COMING!  The bubble is going to burst.  One of the largest bubbles about to pop is the student loan bubble.  I am of the opinion, it can no longer be sustained, the Department of Education has tried to hold this together for way too long.  The truth is out! 

The number of loans overdue and in serious default has never been higher, the age of debtors has never been higher, the dollar amounts owed and unpaid has never been higher.
Yet the U.S. Department of Education (DOE) is either in complete denial or in complete conspiracy mode.  

Last time I wrote about one of the newest schemes available to delinquent student loan borrowers, called the REPAYE program.  For decades now the DOE has offered forms of repayment avenues to help struggling students extend the payment schedule.  All I see is that the DOE has realized the monster is too big to contain, and that giving the monster a little longer rope, might ease the inevitable attack, death and destruction hiding in the bushes. 

When the monster rises up, take notice... and don't say I didn't warn you!  In the meantime, if you cannot see any way out of the woods, consider learning about 11 USC §523 (a) (8).

My future blogs are going to provide more valuable help in what you need to know and just how it can be done.  You are not alone, there are thousands right now who need a way out!

Happy (debt free) New Year!

Yours truly,
Bob Preston

Wednesday, December 23, 2015


Merry Christmas and Happy New Year!

The President and the United States Department of Education has just unwrapped a gift for every college student who ever took out loans to get an education - But beware! Sometimes the gift wrapping is much more attractive than the present. This one should be opened with extreme care, or as I will suggest, left under the tree!

Effective December 17th, 2015 President Obama's "Revised Pay as You Earn" aka REPAYE is now an "option" available in the gift sack of what I can only describe as the White Elephant Gift of the Year!

REPAYE is the latest repayment scheme and like the other loan payment programs attempts to "help" struggling debtors.  My idea of help must be different from the President and the Department of Education, because I see more problems with this plan than any viable aid to the debtors.

Once again the Department of Education (DOE) decorates and wraps up the plan in a display of glittering ribbons and bows - and you guessed it "there are plenty of strings attached" and the surprise revealed inside could be non-returnable.

The gloss and glitter appeal is laid out in the attraction that the plan is a "fit-all" plan.  No matter how old the debt is, regardless of the debtor's income, and with the lure of only having to pay 10% of discretionary income for only 20 years, everyone is eligible for this fantastic gift!

But wait!  Hold your horses (or reindeer)!  Yes... you can be sure - there is some "coal" in the stockings here.  Not everything that glitters is Gold(en). Doing a "sneak-peak" when no one is looking often reveals what is under the fancy wrappings.

In the case, we find a few unfavorable things in the box.  First, to be eligible for this new plan the borrower cannot be in default on the loan(s).  Second REPAYE is not available for student who have taken out private loans.  Direct Loans yes, private funded no.

Yes you can have a federal loan for a for-profit school or trade school, then roll it into a  Direct Loan -  it will then be eligible for REPAYE. So REPAYE is open to students with for-profit schools and trade or technical schools if their loans are consolidated, a process that is part of enrollment in most all of the ICR (income contingent repayment) plans.

Third, while REPAYE is open to anyone who has loans granted under the former Federal Family Education Loan Program (FFEL) system or via Perkins (whereby the money originated from banks who backed the loans, changes made in 2010 made DOE the lender and holder of the notes, making the borrower a pawn of the Federal Government); in order for the borrower to get into REPAYE they must agree to a consolidation and convert those loans into a Direct Loan (William D. Ford Direct Loan Program - owned and operated by the DOE in Washington, DC).

Fourth, Parent PLUS loans are not eligible for inclusion in  REPAYE, and must be paid under the terms agreed to by the lender and borrower.  

Fifth, while REPAYE seduces the borrower with such tinsel as removing the "Partial Hardship" requirement that was an eligibility requirement in prior programs, the fact remains that this repayment scenario takes the original 10-year term and extends it to 20 years! Well, yes, twenty years for undergraduate degrees.... but 25 years for graduate degrees.

Sixth danger! Beware of "The Old Bait and Switch".  Your Uncle's gift to you is this... yes you can switch into REPAYE from any of  the (4) older income-driven plans.  However, rub the sand out of your sleepy eyes first! Because any unpaid interest will be added to your loan principle which of course causes interest to accrue on a higher loan balance, and if you do consolidate your FFEL into REPAYE, all previous payments no matter how many years made, do not count towards the 20 or 25 year pay off period to earn  the promise of so-called "forgiveness".

Seventh drawback... REPAYE participants must update their income status annually. Now who wants to bet that if you fail to do so, and the Feds check your IRS returns and the income has changed, that they will cancel the plan and demand immediate pay-off?  Just thinking here... and knowing the "Grinch" as I do, I could see that happening to spoil someones Christmas.

Oh, and married borrowers can no longer "exclude" their spouses income!  That means you must include it in the yearly report, and pay accordingly based on combined incomes!

Finally, Santa and the DOE have one more trinket in their bag!  DEBT FORGIVENESS!
Yes, Virginia there is a Santa Claus!  But this Elf has a real treat in store for those who fall for this gimmick.

While stuck in a 20 or 25-year repayment plan and paying on those loans based on your income and having Big Brother checking in on your earnings, taking a mere 10% of your wages (until Big Brother changes the percentage?); the debtor glides along with visions of sugar plums and loan forgiveness dancing in their heads, only to come to face-to-face with Scrooge the collector!  Yep! And this Scrooge does not get a change of heart!

At the end of REPAYE, with the loan forgiven, the debtor is fully responsible for the TAXES on the amount forgiven!  Ho! Ho! Ho! 

(Can you agree there is nothing Merry about this? -- I think I will take the lump of coal, thank you very much!)

Sunday, December 20, 2015

Undue Hardship Discharge Prevails Over Income Based Repayment Defense

While the U.S. Department of Education has made a history in the last few decades by taking the stand that student debtors who file for bankruptcy be required to agree to some form of income-based repayment plan, a recent case has poked a big hole in that hot air balloon defense!

Settled on November 10th, 2015, Abney v. United States Department of Education, Michael Kevin Abney, prevailed in his Adversary Proceeding under 11 U.S.C. §523(a)(8) proving undue hardship and successfully discharged nearly $38,000.00 in principle and interest for four years of education even though he did not earn a degree.

Michael Abney, age 40, is a divorced delivery truck driver living on a net income per month of just $1,183.00. Mr. Abney is at or near the poverty level for sure; over the life of his loan, he has been homeless, for a time living in the cab of his truck.  Abney has been hospitalized for stress and treated for depression, and currently does not own a car, his monthly expenses outweigh his income by a negative $203.00 a month - which most likely is a gross understatement of his true financial condition?

Abney was not trying to get out of paying for his education!  In fact he paid $11,000.00 before falling into default status on the original loan amount stated as approximately $25,000.00.  Life events hit Mr. Abney like a tidal wave.  Unable to graduate with a degree, Abney divorced and paying child support, had to find work to maintain a minimalist way of life.  Costly divorce and child visitation fights and costly legal fees regarding these litigation efforts, along with medical bills and a default judgement owed to Bank Of America, forced Abney into Bankruptcy with nearly $116,000.00 in unsecured debts.

The bankruptcy case was filed in the Eighth Circuit which applied the Totality of Circumstances Test in order to justify the proof of Undue Hardship.  Under that test the court looks at these factors: "(1) Total present and future incapacity to pay debts for reasons not within the control of the debtor; (2) whether the debtor has made a good faith effort to negotiate a deferment or forbearance of payment; (3) whether the hardship will be long-term; (4) whether the debtor has made payments on the student loan; (5) whether there is permanent or long-term disability of the debtor; (6) the ability of the debtor to obtain gainful employment in the area of study; (7) whether the debtor has made a good-faith effort to maximize income and minimize expenses; (8) whether the dominate purpose of the bankruptcy petition was to discharge the student loan; and (9) the ratio of student loan to total indebtedness" Yes, nine (9) criteria must be met in this test!

And yet, Abney prevailed under the Totality of Circumstances Test.  Perhaps because the Department of Education (DOE) was bent on getting Abney to agree to an Income-Based Repayment Program?   While the Eight Circuit Court has frequently agreed with the DOE stating that "the availability of the IBRP is a factor to be considered", this time, the court "rejected the DOE's argument that the mere availability of the IBRP made it impossible for Mr. Abney to show undue hardship.... (h)olding that eligibility for a program such as IBRP ipso facto leads to denial of an undue hardship would deprive the Court of the discretion granted by §523(a)(8)."

There!  The Court took a stand against the Behemoth known as the DOE - and at least in this case, has taken back its discretionary right to decide against a plan that provides no "Fresh Start" for the debtor; the judge making these conclusions: "Mr. Abney (has) established the unlikelihood that he would ever have sufficient income to enable him to pay anything toward the student loans. With respect to (the) hardships engendered by the IBRP (program) the Court (finds) :1) participation would require Mr. Abney to 'rehabilitate' the loans with nine monthly payments of more than $5; 2) there was potential harm to Mr. Abney's credit rating and access to employment and housing by virtue of the continued existence of the unpaid debt; 3) the debt would continue to accrue interest, and; (4 even if the debtor successfully completed the IBRP and had the debt forgiven, he would suffer the tax consequences of debt forgiveness which would not apply if the debt were discharged in bankruptcy. 
To the extent that the debtor might be able to put away money for retirement, the tax consequence of debt would eliminate that possibility." (emphasis added)

As a final pin prick into the DOE's balloon, the Court said: "Mr. Abney (has) made every effort humanly-possible to pay his child support and student loans.... the mere availability of the IBRP is of no help to the debtor's current or future situation but, rather imposes additional burdens on him". (emphasis added)

AMEN!  Can I get an Amen?

Source:  National Consumer Bankruptcy Rights Center, dated December 14, 2015.

Friday, November 20, 2015

The Grinch who stole your education funds!

Christmas is next week!  And yes we had "Thanksgiving" a couple of weeks ago!  But this year it is pretty hard to be thankful or joyful! There is Terror is the Air! Trying to find a way to be thankful right now is not easy.  For many, this holiday season will only be one of grief, and perhaps a ramp up of fear for the lives of loved ones everywhere.

What has become of this world? Yes, we have had hundreds if not thousands of years of turmoil. Wars, tyrants dictators, the slaughter of the innocent for the gain of a few has been the theme of evil for millennium.

Look around... can it be all we see is Greed and Hated? Where is the love?  Where is benevolence?

Should we confess that society is becoming less civil and less civilized?  Shall we admit that there is a war for the very "souls" of the common man?  A war promulgated by the Elite and wealthy in order to raise themselves higher and push the commoner further down?

Consider this... the Elite with a plan.  A plan to bring about a society of the have's and have-not's.  A class of division that includes selecting who lives and who dies and using fear and racial conflicts to meet that objective.

The Elite are so self-absorbed in acquiring POWER and STATUS and WEALTH, that they will do anything to achieve those goals.  Including deceiving the masses into to thinking that those in the ruling classes have our best interests in mind.

They promote socialism and promise to take care of us all with free education, free housing, free food, free this and free that.  All the while allowing the common working class to be taxed beyond anything ever seen in history.  Using FIAT money (printing dollars faster than the speed of light), and all the while they continue to expand the debt ceilings of America and the World Banking System.

Wake up! There is NO money!  It is all a glass wall falling off a cliff ready for an explosive crash!  Are you ready for what is coming?  If you think there is chaos going on now just wait!

There have been crashes before.  The Great Depression, and before that the failure of Germany's economy and many others.  Recently the 2008 mess with a near depression except for another band-aid bailout by the Federal Reserve, which is a total phony conglomerate run by the Elite for the benefit of the Elite's plan to have a One World Government.  The end is coming soon.  The end to life as we know it.  The glass is already half way off the cliff!  A large crash is imminent.

So you might ask what does this have to do with the topic of "Undue Hardship"?  Well I will tell you.  Those of us who were "duped" into thinking we needed a college degree to succeed and prosper here in America, have been tricked and robbed.

Take for example the recent arrest and conviction of the CEO of Dade Medical College in Florida!  "For-profit college operator Ernesto Perez — a big-time donor to South Florida politicians — officially pleaded guilty Monday to illegally bundling more than $159,000 in campaign contributions"  In fact... "Its former CEO, Ernesto Perez, is a high-school dropout and former rock musician who at one time made a salary of $431,000 a year; and the college collected $100 million in federal student aid money over a three-year period."

Perez's contributions were listed as:

Perez and his wife have given at least $100,000 to political candidates and PACs, with recipients including Barack Obama, Mitt Romney, Senators Marco Rubio (R-FL), Bill Nelson (D-FL), Harry Reid (D-NV), and Robert Menendez (D-NJ), Reps. Debbie Wasserman Schultz (D-FL) [Wasserman is also the current Chairperson of the DNC], and Joe Garcia (D-FL) . . . .
How deep does it go?  
Miami Herald writer Fred Grimm reported that Perez and his associates made $750,000 in political contributions. And a couple of Florida state legislators were actually on DMC's payroll. 

Indeed, Perez plead guilty to making illegal campaign contributions as the head of a Private College where very few students actually graduated, yet they were enticed to enroll and take out huge student loans with promises of high paying jobs in the Medical Field!

In fact according to the Miami Herald: "DMC students ... didn't do so well.,. DMC's  Hollywood (Florida) campus had a pass rate of only 13 percent on the 2014 Florida nurses' exam."  Once again we see that the promise of success was fraught with deception and fraud.

There is only one point to be finalized here....  And that point is -- How deep does this go?

If a phony like Perez (identified as a high school drop-out, drug using ex rock band member) can find his way into the top spot of a Private College and for a few years pull off a scam where by he and his wife use hundreds of thousands of political contributions to fleece the unsuspecting public and unfortunate students who are now "stuck with" student loans which they owe and no degrees and no jobs!  Imagine this... consider all the back-room deals that take place which no one hears about.  Deals between University Board Members and Wall Street bankers and Politicians and Political Appointees running the Department of Education and the Student Loan Racket!  

So Perez got caught.  But how many others in this good-old-boys-club have not?  If you have not figured it out yet... Education is a BUSINESS!  And those managing this "multi-trillion dollar business" are the ones benefiting! 

Perez -- He is only the tip of the iceberg!

Have you ever Googled to see what the salaries and benefits are of some of the players?  For example 42 Private College Presidents make over a million dollars a year!  "The University of Chicago's Robert Zimmer was the highest paid president on the new list, earning $3,358,723. However, 40 percent of his income was due to deferred compensation." (Source: The Huffington Post, by Tyler Kingkade, December 18, 2015).

Oh and guess what?  When Yale's President Richard C. Levin stepped down after the 2012-2013 school year he got a massive $8.5 Million Dollar Payoff!  You might ask... For doing what? Officiating at a few graduation ceremonies? The article speaks to the compensation of Levin and other College elites: "Presidential pay has been rising faster than inflation in recent years, and much faster than earnings for other college employees, according to that analysis.(The) growing pay can be controversial at a time of rising tuition and soaring student debt, compensation experts say schools are increasingly competing for talent with the private sector, where pay can be much higher."   (Source: Wall Street Journal, Melissa Korn, May 19, 2015)

Like I say, Education is a business, and it is a BIG BUSINESS, and here we see that even the execs at these colleges are seen as potential talent for big corporations!  My education cost me nearly $55,000.00 in 1996, and there were NO JOBS IN MY FIELD at graduation!

Thanks to the elitists I believed the lies that getting an education would make my life better!  I was duped like millions of others who are now unable to pay off our student loans, all the while the government continues to loan out money which in turns pays the massive salaries to both public and private college executives, who in turn make back room deals with those politicians, who in turn keep loaning out money to unsuspecting students and their families!

Does anyone see something wrong here? I certainly think there is!  

Comments welcomed... 

Read more here:

Friday, November 13, 2015

A letter to the U.S. Department of Education

U.S. Department of Education
Office of Career, Technical, and Adult Education
400 Maryland Avenue SW
Washington, DC 20202-7100

RE: Request for Significant Documentation

Dear U.S. Department of Education,

The purpose of this letter is to request significant documentation and data from the U.S. Department of Education (Dept. of Ed.), for the explicit use in an adversary proceeding.

1)      It is my belief and contention that there has been a concerted effort by the Dept. of Ed. to reduce the number of defaulted student loan rates.
2)      It is my contention and belief that the efforts made to statistically show this reduction is being made and effectively enforced, is in fact a gross misrepresentation and misreading of the law, and an injustice to certain borrowers.

In my many hours of research into the subject of adversary proceedings and study of court cases of destitute and overburdened borrowers and debtors, there has appeared a consistent theme of aggressive behavior and strong-arm tactics by agents of the Dept. of Ed. and the Department itself, to be unrelenting and unwilling to allow remedies for destitute debtors.

These actions and tactics seem to have been engaged upon in an effort to appease and or satisfy certain directives of the Department of Education or directives and or inquires from the legislative bodies of the U.S. Congress and or Senate of the United States.  The nature of these acts has been found to be biased and unfair to a large segment of borrowers based on a number or studies and articles I have read, and it is clear, and nearly all writers agree, that the current enforcement system and even the latest repayment re-structuring methods are biased against destitute debtors.

It is safe to conclude then from what I have read, that major efforts have been made to establish restructuring of loan repayment such that these loans can be categorized so as not to be labeled or placed into a defaulted loan status. However it makes absolutely no economic sense to just say a loan is not in default.

For example, the use of the Income Contingent Repayment Plan (ICRP) is not a fit-all plan when the circumstances are such that a senior citizen living near the poverty level on SSDI or even on straight Social Security; who has, due to no fault of his or her own, been unable due to medical or financial problems, to pay off their student loans and whose loans went into default and are now owing to the U.S. Department of Education. 

In my case, I am 67 years old, and my last student loans were granted in 1995.  When I completed my degree programs, and graduated in 1996, I was unable to find employment in my field of study.  What I was told by educators about the opportunities for high pay and success were no more than a pipedream.  Several years later, I applied for and was awarded Social Security Disability Income.  My career hopes of using my graduate degree to earn a substantial living were not to be realized in my lifetime.

When I was employed I did make payments to the Loan Servicers, and I have those records of payments, to show I made a good faith effort.  As a college student, I was diligent in informing the Loan Services, and thus the lenders, of my status.  The Loan Services assisted me in granting deferments and forbearances, and worked with me in payment plans. In respect to that, I can say they performed well.  When however my circumstances became dire and I was unable to make loan repayments due to my medical conditions, the loans were consolidated and then turned over to collection agencies, which resulted in many thousands of dollars in penalties and other surcharges being added to the original loan balance.

Currently my monthly net income is $1,205.55.  My student loan is now approaching $130,000.00 and climbing each and every day.  The original loan amount was the total approximation of $55,000.00 back in 1996. My situation is not going to change.  I am living from month to month on $1,205.55. Each month my retirement income is “garnished” via a treasury offset forced upon me in a vain attempt to pay the interest on my defaulted student loan.  The garnished payments are applied only to the interest and in fact do not even come close to covering the ever increasing amortization taking place.

I have no money, no IRA’s, no portfolios, no stocks or bonds, and I have no insurance policies (not even a burial fund). I have no savings accounts, no real estate, no assets and no personal property other than a 16-year old rusted out pickup truck that is not drivable because the transmission has failed, and the clothes I wear.  I live with my daughter and her husband and pay only a small percentage towards the very expensive DC Metro area rent to my daughter.

In light of my circumstances I feel it necessary to consider the following facts in regard to the current plight and the efforts required to collect on this 26-year old defaulted loan:

v     The Department of Education has spent thousands of dollars maintaining my loan.
v     Attempts by the Department to collect and bring this loan current are not working.
v     Garnishing retirement annuities has not paid down any amount on this loan.
v     The Department “denied” 2014 TPD request for discharge due to total disability.
v     A second application for TPD consideration this past year was never answered!
v     Loan forgiveness programs are no more than re-financing scams and no help.

Therefore, I seek the following information and documentation:

A)    In order to prove my contentions listed at the beginning of this letter, I request:

1)     All directives, memorandums, emails, position papers, and strategy papers which are internal to the Dept. of Ed., regarding the efforts undertaken by the Dept. to demonstrate publicly or for internal use, to reduce or show a reduction regarding the default rates on student loans.

My understanding is that these efforts began in earnest in the year following 1976, when bankruptcy laws were changed and no longer allowed the discharge of student loans without exceptions.

In the past I have always been told that student loans are impossible to be discharged in a bankruptcy.  No one in the Department of Education or any of the Loan Servicing entities ever alluded to suggesting that there are exceptions and that bankruptcy discharge is possible.  They always said that bankruptcy was not allowed for student loan debt. Even bankruptcy attorneys have told me point blank “you cannot get rid of your student loans going through (a) bankruptcy”.  What I know today, that this is simply not true!

B)     In order to prove my beliefs that the Dept. of Ed. has consistently violated the
rights and understanding of debtors during an Adversary Proceeding, I request:

1)      All directives, memorandums, emails, and written Departmental policies which direct or authorize Department of Education employees and staffers to inform debtors that bankruptcy of student debt is not allowed or permitted.
2)      All directives, etc. that are used to train or inform Department of Education employees to inform and guide debtors into one of the repayment plans such as the ICR or the ICRP.
3)      I need Departmental Level documents which are specific to these listed above, and that fully answer these questions:
a.       Specifically, are there “goals” each employee must meet each month which show that students were enrolled in such repayment programs?
b.      Are employees “trained” to guide or enroll debtors into a repayment program and tell debtors that is the only option available to them?
c.       If a debtor asked about filing bankruptcy and or an adversary proceeding, what is the debtor told by employees of the Dept.?
d.      What letters are sent out to student debtors regarding repayment programs or filing bankruptcy to discharge student loan debt?
During my research I have discovered that there appears to be a concerted effort on the part of the Dept. of Ed. to deny honest debtors any relief through write-offs, forgiveness plans for long-term debtors, and or compromises (while credit card companies and other loan institutions have historically allowed this). While on the other hand, the courts have been used by all manner of debtors to file bankruptcy and have all manner of debts discharged and allow a “fresh start” to those who sought such relief from the courts.

C)    Research shows that there is much evidence to show that the Dept. of Ed. fails to follow the Debt Reduction Act and has a history of pursuing up to and even harassing student loan debtors, who are unable for reasonable cause, not able to resolve their debt issues to the satisfaction of the Department of Education.

D)    In order to prove my point here, I request documents from the past 4 years:
1)     Total number of recorded defaulted student loans.
2)     Total number of Chapter 7 (only) filings where student loans are listed.
3)     Total number of debtors who filed an “adversary proceeding” when seeking a Chapter 7 Bankruptcy through a U.S. District Court.
4)     Any memorandums on how the adversarial proceeding was resolved, e.g.
5)     Total number of adversary proceedings that favored the debtor.
6)     Total of  “Pre-trial settlements” between Dept. of Ed. and Plaintiff, with a description of the results of the settlement.
7)     Total of “Trial cases” and a written synopsis of the results of the trial.
8)     Any written reports that the Dept. of Ed. has in regards to the discharge of loans through an adversarial proceeding.
9)     Any internal reports, papers, memorandums, emails, analysis papers, office recommendations, policies and procedures, and guides made by the Dept. of Ed. legal department or staff that detail legal strategies regarding the use of an adversary proceeding by debtors to obtain discharge of student loan debt.
10) Any report indicating the total number of students who have debts that are more than 10 years old who are now living on government annuities or subsistence, and to whom the Dept. of Ed. continues to actively pursue payments of student loans.

The research I have done has also uncovered a trend by the Department of Education that is disturbing and needs to be addressed.  When reviewing many case outcomes of debtors who filed bankruptcy and then followed up with an adversary proceeding using U.S.C. 11 § 523 (a) (8) to prove “undue hardship”, I found that the Dept. of Ed. was very aggressive and in many cases, went to great lengths to provide an “assault based defense”.  The assault on some of the plaintiff’s included demeaning statements and accusations and even character assassination.  I discovered that the department of Education has even gone as far as to create a legal defense department that is specific to cause of defeating any debtor making their case of undue hardship.

The conclusion I came to was that these aggressive behaviors and actions on the part of the Department of Education violates the debtor’s ability to obtain a “fresh start” thus violating the intent and purpose of the United States Bankruptcy Code and laws pertaining to it’s enforcement. 

v     The Bankruptcy Code first and foremost speaks to the “fresh start” provision, in fact that provision takes precedent over U.S.C.A. 11§523 (a) (8).
v     The “fresh start” policy is designed to allow a person to resume or obtain a life with qualities associated with mainstream American ideals and freedoms.
v     Bankruptcy in America is intended to allow all debtors, including student loan debtors the right to live a lifestyle which approximates “American Middle Class”, not to force debtors to live in poverty until they die.
v     Neither Chapter 7 or Chapter 11 or any of the other Bankruptcy codes have the intent of forcing into poverty or leaving a debtor to live in a sub minimal state.

On the other hand looking at the history of student loan debtors there is a quite a large  disparage.  Research shows that student loan debtors are treated with a much harsher interpretation, and I have found that student loan debtors are unable to have debts discharged unless they are at or below the National Poverty Guidelines.

I do not believe, nor has a case been made, that demonstrates that there is a difference to be made between a debtor owing consumer debts which they are unable to pay , and student loan debts that the debtor has no way of resolving outside of a bankruptcy proceeding.

My contention from my research indicates the bankruptcy laws are intended to allow filers to have their debts discharged to allow the debtor to re-establish a life at a middle class or sub-middle class level standard and not at the poverty level.

Yet I found that the student loan debtor is judged using a different scale. In order for a holder of student loan debt to be granted a discharge in a bankruptcy, they must prove “undue hardship” as part of U.S.C. 11 §523 (a) (8) and use an adversary proceeding in order to “prove” a case for discharge.  This law is in effect and is the only recourse for student loan debt, and in fact was designed to specifically address student loan debt.

It arises then that I believe there is reason to suggest the Department of Education has adopted a stand that in order to determine what defines “undue hardship” that the Dept. of Ed. has elected to use the Federal Poverty Guidelines as a measuring stick. 

To my knowledge there is no written rationale to support this, although there may be some policy within the confines of the Dept. of Ed. that calls for this to be used to allow or disallow student loans to be discharged under the provision of “undue hardship”.

E)     Thus, in order to prove my point on the above, I request:
1)     Any and all internal Dept. of Ed. documents which indicate a policy to utilize the Federal Poverty Levels as a measure of determining and defending in court “undue hardship”
2)     All internal Dept. of Ed. documents, memorandums, policies, procedures, emails and program guidelines which are used to determine the social status or ability to pay of debtors.

The reasoning for requesting the above listed documents is that research of cases has led to making some observations regarding the outcomes of adversary proceedings by debtors of certain social and economic classes. Those include not only those who fall into the poverty spectrum, but also racial minorities, single people, women, the well-educated, those living above the poverty level and other classes and minorities. This would include the distinction of debtor based on age, and medical and physical condition. I believe I am in one or more of these minority classes of debtors.

F)     In this regard, I need more information to prove my point, I request:
1)     All copies of reports, studies, memorandums, policy and procedures, emails, or analysis or written findings which show that the department of Education is aware of discriminatory practices in regards to students based on social or economic class or ability to pay.
2)     All documents internal to the Dept. of Ed. that detail procedures or provide guidelines to attorneys or the legal department within the Dept. of Ed. addressing or outlining a defense strategy to argue against the plaintiff when there is an adversary proceeding filed using the “undue hardship” rule of law.
3)     The above is to include any and all internal documents that are used to interpret statute U.S.C. 11 §523 (a) (8)  by internal legal defense or via external defense lawyers under retainer by the U.S. Department of Education.

Research has also discovered that there are large differences between the U.S. Bankruptcy Courts in how they interpret and rule on undue hardship.  When the Congress revised the bankruptcy Code to amend and redefine U.S.C. 11 §523 (a) (8), they did not define “undue hardship”. Rather, they left it up to the court and perhaps more specifically Judges within individual districts to interpret this phrase.

What appears to have developed since the original law was revised to exclude student loans from bankruptcy has been that courts have been forced to develop and implement certain “tests” to determine what undue hardship is when the “exception rule” and the “unless” of 11 §523 (a) (8) is pursued by the debtor filing a Chapter 7 or 13 personal bankruptcy.

It appears then that two major “tests” to determine “undue hardship” have come to be the norm in U.S. Bankruptcy Courts across the nation. One such test has been accredited to the 8th District Court and has become known as the “Totality of Circumstances”. 
The totality of circumstances appears to consider three determinants about the debtor: 1) the debtor’s past, present and reliable future financial resources, 2) the debtor’s reasonable and necessary living expenses, and 3) other relevant facts and circumstances.  This test is used in at least nine of the U.S. Districts.

The 2nd test is named the “Brunner Test” The Brunner test also considers three major areas to determine “validity of undue hardship”  These are called “the 3 Prongs” . The first prong requires a demonstration that the debtor cannot maintain a minimal standard of living (and that is another term which is not easily definable).  The second “prong” looks at additional circumstances and the inability of the debtor being able to repay the loans in the future. The  third prong in Brunner looks at whether the debtor has made a good faith effort in regards to paying the loans. An unknown number of courts have adopted the Brunner Test,, and some are known to consider other measures to determine what “undue hardship” is determined on a case-by-case basis.

In conclusion, I am of the opinion that since Congress failed to provide a clear definition of  “undue hardship” in the statute 11 U.S.C. §523 (a) (8), that somewhere the Dept. of Ed. has an interpretation they rely upon.  Therefore it is also my opinion that the Department of Education must have within their policies and procedures and legal departments written documentation and directives on how to defend against this clause.

That is why I will reiterate the request made above to receive a copy of all documentation regarding the defense of 11 U.S.C. §523 (a) (8) as follows:
“(8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for— (A)(i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or (ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;”

I am making these requests for all of the aforementioned documents in order to prove my points regarding the practices and policies and procedures of the U.S. Department of Education in regards to the ability of said debtor to find remedy for his financial situation.

My requests are simple and they have been well articulated.  I believe that this information will help in determining the correct course of action to remedy the issue at hand.  Therefore, with all due respect I look forward to receiving these documents in a timely manner. Please address all correspondence and mail all requested documents to the return address of this letter.

Thank you,

Poverty Bound Student Debtor

Wednesday, June 10, 2015

Undue Hardship - Updates Needed - 2015 and Beyond - Time for Change?

Undue Hardship - Updates Needed -

2015 and Beyond - Time for Change?

In my first look at Undue Hardship I gave a brief overview of the history and difficulty of defining what undue hardship is, and how the various courts have tried to develop "tests" to support their interpretation of the clause.

Looking back at what was published in regards to the "intent" we have the following statement from the Bankruptcy Commission.
"[Student loans] should not be dischargeable as a matter of policy before [the debtor] has demonstrated that for any reason he is unable to earn sufficient income to maintain himself and his dependents and to repay the educational debt. In order to determine whether non-dischargeability of the debt will impose an “undue hardship” on the debtor, the rate and amount of his future resources should be estimated reasonably in terms of ability to obtain, retain and continue employment and the rate of pay that can be expected. Any unearned income or other wealth which the debtor can be expected to receive should also be taken into account. The total amount of income, its reliability, and the periodicity of its receipt should be adequate to maintain the debtor and his dependents at a minimal standard of living within their management capability, as well as to pay the educational debt."
The above statement gives us some idea about the "intention" of the legislature regarding the ability and effort expected from a college graduate in regards to repayment of a Federally backed student loan.  The first point speaks to the dischargeability being a "matter of policy".  Which if taken in respect to describe a general policy which up until this point was to "give people and businesses a fresh start when they can no longer pay their debts." (

In addition, the statement above did nothing to help clarify the clause "undue hardship" nor provide clear objective guidance to the 94 District Courts, and the 13 Circuit Courts (for appeals) who are charged with determining the outcomes of the various chapters of bankruptcies.

The above quote provides only legislative intent as to the original meaning of undue hardship. The analysis in the above quote is the starting point from which all of these tests are formulated. The undue hardship doctrine is an elusive standard. Courts have historically struggled to formulate tests for its application. As typically stated, student loans are exempt from bankruptcy "unless" excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor's dependents. 11 U.S.C. § 523(a)(8) (emphasis added).

As I write this today I want to remind you that this legislation was composed and enacted nearly 40 years ago.  A lot has transpired in forty years, and the Bankruptcy Judges, District Courts, Appeals Courts and even the Supreme Court continue to try and figure out "just when" an "Unless" is appropriate! 

Hundreds and perhaps thousands of cases later, the courts have attempted to define, test, and rule on the elusive meaning of what constitutes undue hardship for a student borrower, and at the same time continue to uphold the age-old right for any non-student debtor to get a "fresh start". The courts even call Bankruptcy the Fresh Start Policy.  Does it seem right that a business or private debtor who owes hundreds of thousands and even millions of dollars can file bankruptcy and every dime be discharged, the debts forgiven and the debtors walk away with a clean slate, while a student owing on student loans is held in contempt by the courts for even attempting to have a debt free life? No, it is not.

Next time I will explore some of the ways in which courts have ridden the wave of trying to find smooth sailing in what has been a stormy adventure - defining 11 U.S.C. §523(a)(8).
Perhaps when the torrent of uncertainty begins to be unfurled, a new horizon will arise?

Next Time: A letter to the U.S. Department of Education

Until Next Time 

Tuesday, May 19, 2015

Undue Hardship Tests - Objective or Subjective?

Undue Hardship Tests

Having myself taught college classes and created many tests as a method to prove the outcome of the lessons presented over a period of time; I found that one of the easiest tests to give and grade are true false tests. The nature of true false tests are that they are objective and generally measure the ability to determine whether statements are fact and usually are a declarative statement which can be judged as either true or false. In other words when there are only two possible outcomes.  By changing a word or phrase a question can easily be manipulated, and the statement either matches a statement previously presented or learned or it doesn’t. (The Instructional Assessment Resources (IAR) Web site, The University of Texas at Austin)

A multiple-choice test question provides more than two possible answers; again, only one of which is correct.  Often in a multiple-choice test the questions can be quite similar and only by careful analysis will the correct answer be determined. Most multiple-choice questions include wrong answers called “distractors”. Ibid.

The other category of test generally requires answering a posed question with an essay or written explanation rather than selecting one of a prescribed set of possible answers. Essay questions are known to be subjective, and while the test can help discover the general knowledge of the student, essay questions also require the preparation and a disclosure of “criteria” on how the test will be graded. In some written tests the objective is to be able to address the subject and be able to prove a point by presentation of facts, statistical analysis, and convincing arguments. With no black and white answer, a test requiring persuasive discussion is clearly subjective as it requires an interpretation that falls in-line with the test creator’s preconceived answer they were seeking. Ibid.

Which brings me to looking at the various tests used to determining “undue hardship” by the various circuit courts.

Undue Hardship

In order to discharge student loan debt, the debtor is required to provide proof that undue hardship exists or will exist in the future if the debt is excepted from bankruptcy discharge.

There is ample evidence that the definition of undue hardship remains not only a point of contention and discussion; this term continues to be subject of “much controversy today… a great deal of which is reflected in the historical debate in Congress that occurred when it considered enacting § 523(a)(8)”1.

The courts were left on their own to define what the legislators meant in 1978 by the term “undue hardship”; and for nearly 40 years the term is still the subject of countless debates, journal articles, and white paper presentations at Bankruptcy Conferences.

While the courts struggled to develop standards for defining undue hardship the legislators also made attempts to restrict the “perceived”2 abusive actions of student loan holders who would file for bankruptcy after graduating and basically get a free ride to a lucrative career with college degree.

In attempts to forestall this potential abuse on the federal student loan programs, the bankruptcy council enacting several changes to 11 §523(a) (8) One of those was to set a 5-year restriction, where debtors were prohibited to file for discharge if within five years of when the loan was due; and only if the filing was a Chapter 7. Finding these amendments a bit too lucrative, in 1990 Congress once more amended the ruling by extending the waiting period to seven years and forbidding discharges in Chapter 13. Eight years pass and once again Congress amends the law. “In 1998, Congress repealed the seven-year exceptions, forcing the financially troubled student to prove undue hardship no matter how long it had been since the time the loan became due.”3

Note: “At this point, it was clear that this “pattern of amendment represents an obvious tendency on the part of Congress to tighten the gaps through which students could avoid loan repayment"4 .Ibid

The last and most current change to the exception clause in §523(a)(8) was enacted ten years ago. in 2005. Under the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), Congress had ample opportunity to review §523 and could have at this point significantly amended the rule or even eliminated it altogether; rather legislators expanded the exception to include “any other education loan that is a qualified education loan.” Ibid
“Prior to 2005, the “undue hardship” exception applied only to loans “insured, or guaranteed by a government unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution” Ibid. 

The current debate now on Capital Hill is what to do about the current debt held by students who borrowed money to attend “for-profit colleges”.

Testing Methods

The Congress left the definition of undue hardship up to the bankruptcy courts. Prior to the mid 1970’s students were able to discharge student loan debt just like credit card debt or other unsecured debt. With the influence of media hype declaring graduates were filing for bankruptcy as soon as they had a degree and even before they had jobs, became the impetuous behind the 1978 legislation to make it more difficult for students within 60 months of graduation to file for discharge of the Federally granted loans.  This was the birth of the undue hardship clause being applied specifically to student debt. 
(Several sources pick one?) i.e. (B.J. Huey, Undue Hardship or Undue Burden: Has the Time Finally Arrived for Congress to Discharge §  523(A)(8) of the Bankruptcy Code?) or 
Copyright 2013 American Bankruptcy Institute. Please contact ABI at (703) 739-0800 for reprint permission).


One of the first cases to bring this conundrum to the bench was in re Johnson, No. 77-2033 TT, 1979 U.S. Dist. LEXIS 11428, at *20 (Bankr. E.D. Pa. 1979).  In Johnson, the Pennsylvania court looked to the 1973 Bankruptcy Commission Report for a definition of undue hardship. The report contained the following guide: “the rate and amount of his future resources should be estimated reasonably in terms of ability to obtain, retain, and continue employment and the rate of pay that can be expected. Any unearned income or other wealth which the debtor can be expected to receive should also be taken into account”.

As a result, the “Johnson Test” was one of the first “Tests” used to define and grade the term undue hardship as it relates to student loan debtors. In formulating the criteria for evaluating what constituted the ability to pay in the future, the court meted out a series of scenarios and “factors” that seemed to only create other scenarios that required answers; the result was a multiple factor examination, which in the end, made test quite cumbersome and complicated and “rendering the litigation burdensome”. Ibid (BYU Review)


Interestingly only eight years later, the same court who created the Johnson Test, rescinded the multiple pronged Johnson test. In Bryant v. Pa. Higher Educ. Assistance Agency (In re Bryant), 72 B.R. 913, 915 n.2 (Bankr. E.D. Pa. 1987), the court acknowledged that test criteria in Johnson was in essence a “complicated three-part progressive test, each level of which has numerous inquiries to be answered before proceeding to the next level” and therefore in Bryant the court declined to continue using the Johnson Test. Ibid.

In Bryant, the court adopted a more statistical approach to defining and determining undue hardship. Again seeking guidance from the commission report, the court looked to defining the term “minimal living standard” or as it is commonly called “the minimal standard of living”. The court looked at the comparisons of the minimum standard of living as it related to the “poverty level”. The court had difficulty defining the minimum standard of living but there were plenty of published statistics on the poverty level within the United States.  Quoting from the BYU article: “While it is unclear what exactly is meant by ‘minimal standard of living,’ the court felt that if a debtor was below the ‘poverty level,’ the debtor was certainly below the ‘minimal standard of living’. For this reason, the court created an ipso facto presumption that satisfying the ‘poverty level’ test automatically establishes “undue hardship.” In a further attempt to add objectivity to the test, the court held that the federal poverty guidelines should be used in making this determination” (emphasis added)

One problem remained to be solved, what then were the criteria for determining what constitutes a minimal standard of living for those living above the poverty level? In order to solve this equation, the court then stipulated that additional points need investigation; those benchmarks were labeled “unique and extraordinary circumstances”, and to assist in solving what constitutes undue hardship there must exist more evidence in regards to the debtor’s situation. The result was looking to a “totality of circumstance” and looking at the whole problem from a more analytical view.

In looking at which tests courts are using, the Eighth Circuit has adopted the “Totality of Circumstances Test”, and this test has been applied in the 1st and 13th Circuit Courts as well.
Besides the term Totality of Circumstances other courts have deemed a debtor to have reached the point of “a certainty of hopelessness”, perhaps for lack of words on how to describe the state of affairs of a debtor who has no way to ever get a ‘fresh start’ due to drowning under the sea of student debt.

For the most part, the remaining Federal Bankruptcy Court Circuits have "adopted" the three pronged "Brunner Test", and while this test attempted to define and construct an objective approach to defining undue hardship, it may in turn have opened a Pandora's Box requiring a truck load of documentation to prove the point, and set in motion a mind-set against allowing discharge without proving poverty exists and that the debtor is near death!


One test remains to be observed, and that is the “Brunner Test”.  This “three prong test” as it is referred to, was devised to clarify undue hardship in the case of Brunner v. New York State Higher Education Services Corp. Here the court established a 3-part objective that included answering the paradigms:
(1) that the debtor cannot, based on current income and expenses, maintain a ‘minimal’ standard of living for herself or her dependants if forced to repay the loans; (2) that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.

The Brunner decision is now over 28 years old.  And there are some who think it not only is outdated but some courts are saying it "was not the case that should have been the poster child for undue hardship"   

Time for Testing Review?

In the present debate today, commentators who oppose § 523(a)(8) argue that the “undue hardship” rule is "unnecessarily harsh", denying debt relief to all but a few select debtors, and usually only to those with dependents and medical conditions that prevent gainful employment. At the same time, debtors with other kinds of debt are not laden with the task of proving undue hardship. This problem is compounded because courts have developed varying standards, and the subsequent lack of uniformity prevents student debtors from knowing beforehand if they might qualify for undue hardship.

1. BRIGHAM YOUNG UNIVERSITY LAW REVIEW 2011, issue 3, Article 10, Student Loans in Bankruptcy and the "Undue Hardship" Exception: Who Should Foot the Bill? Kyle L. Grant
2. Ibid
3. Ibid

Next Time: Riding Out the Storm - New Horizon?

Until Next Time