Eleventh Circuit Reads Husky Narrowly, Perhaps Too Narrowly
Reading Husky narrowly, the Eleventh Circuit requires that fraud occur before a debt arises to make the debt nondischargeable under Section 523(a)(2)(A).
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Repaying Salary After Arrest Isn’t Compensation for Loss and Isn’t Dischargeable
An obligation can be penal in nature, and thus nondischargeable, even though it’s measured by pecuniary loss.
House Judiciary Committee Approves Student Loan Bankruptcy Relief Bill
The House Judiciary Committee yesterday approved (19-5) a bill that would extend bankruptcy protections to borrowers with private or federally held student loans, Bloomberg Law reported. H.R. 2648, the "Student Borrower Bankruptcy Relief Act," strikes the section of the Bankruptcy Code that makes it much more difficult for student loan borrowers to discharge their student debt in bankruptcy, Forbes reported. Borrowers must generally prove that they have an “undue hardship” in order to discharge their student loan debt in bankruptcy. These restrictions initially only applied to federal student loans, but were subsequently expanded to cover private student loans following the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The “undue hardship” standard applied to student loan debt is not adequately defined in statute, so bankruptcy judges have established various tests (which vary by jurisdiction) to determine discharge eligibility. Read more.
Click here to view the full text of H.R. 2648.
The House Judiciary Committee also approved other pieces of legislation to amend the Bankruptcy Code, including:
- H.R. 7370, the Protecting Employees and Retirees in Business Bankruptcies Act of 2020 (20-10 vote).
Surety Bonds Aren’t Executory Contracts and Can’t Be Assumed Even if They Are
Insurance companies must nail down the treatment of performance bonds before plan confirmation.
Student Loan Servicer Sanctioned $378,000 for Civil Contempt by New York Judge
Bankruptcy Judge Martin Glenn imposed civil contempt sanctions for ignoring court orders over five years.
Not All Student Loans Are Nondischargeable, Tenth Circuit Holds
Tenth Circuit joins the Fifth Circuit by holding that student loans are not ‘educational benefits’ under Section 523(a)(8)(A)(ii).
Claims Discharged in Chapter 7 Revive If the Case Is Converted to Chapter 13
Courts are split over the effect on claims discharged in chapter 7 if the debtor converts the case to chapter 13.
Parental Support Isn’t Counted on Discharge of Student Loans, Judge Kendig Says
Private charity is not considered to be part of a debtor’s income under the first part of the Brunner test.