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Ninth Circuit BAP Backs Away from Automatic Dismissal of ‘Marijuana’ Cases
Debtor must violate criminal law to justify dismissal, concurring opinion says.
Judge Name - Do not use it.
Maureen A. Tighe
Trump Administration May Make it Easier to Wipe Out Student Debt in Bankruptcy
Student loan borrowers may finally have their day in court, CNBC reported. The Education Department said it will review when borrowers can discharge student loans, an indication it could become easier to expunge those loans in bankruptcy. The department said it is seeking public comment on how to evaluate undue hardship claims asserted by student loan borrowers to determine whether there is any need to modify how those claims in bankruptcy are evaluated. Meanwhile, college-loan balances in the U.S. have jumped to an all-time high of $1.4 trillion. The average outstanding balance is $34,144, up 62 percent over the last 10 years. Roughly 4.6 million borrowers were in default as of Sept. 30, also up significantly from previous years. The national student loan default rate is now over 11 percent, according to Department of Education data. Student loans are considered in default if you fail to make a monthly payment for 270 days. Your loan becomes delinquent the first day after you miss a payment.
Solvency May or May Not Result in Dismissal
The Fourth Circuit and a Delaware bankruptcy judge reach opposite conclusions on motions to dismiss petitions by solvent debtors.
Judge Name - Do not use it.
Laurie Selber Silverstein, J. Harvie Wilkinson III
Trump Administration Looking at Bankruptcy Options for Student Debt
The Trump administration is looking to clarify when Americans can discharge student loans in bankruptcy, responding to concerns that more borrowers will be stuck under huge debt burdens for years, the WSJ Pro Bankruptcy reported. Since 1998, federal law has prohibited Americans from discharging student loans made by the federal government, except in extremely rare circumstances. Congress expanded the prohibition to cover private student loans in 2005. Only borrowers who file for bankruptcy and prove an “undue hardship” in repaying their loans are permitted to have their loans expunged. Congress never defined “undue hardship,” leaving it to bankruptcy judges to decide case by case. They set a high bar. Very few borrowers have had their loans expunged in bankruptcy, and student-borrower advocates say many others don’t even try. The Education Department, in a public notice set to be released today, said that it was considering whether to clarify what factors should be considered in determining whether borrowers meet the threshold for undue hardship. Read more. (Subscription required.)
The ABI Consumer Commission's Committee on Case Administration and the Estate is considering the important issue of student loan debt and bankruptcy, and the Commission is reviewing a paper submitted by ABI's Consumer Bankruptcy Committee at its last open meeting. Click here to review the submission.
Discussion and analysis of options available to student loan borrowers are available in the updated and revised Graduating with Debt: Student Loans under the Bankruptcy Code, Second Edition!
Journal Issue
Bankruptcy Code