swc65 wrote: Anonymous Loser wrote:
And the whole thing about federal loans and bankruptcy is that you cannot discharge education debt with bankruptcy... meaning that even if you file chapter 11 and all of your other debt is cleared, you will always owe student loans. Meaning that if you were irresponsible and took out car loans, home loans, and went on credit card sprees, you'd be less screwed than taking out education debt because you can never ever have it written off.
I'm not sure why this myth that student loan debt is not dischargeable in bankruptcy is so persistent. I've long since learned that TLS posters will not bother to make even the most cursory investigation to determine if what they are saying is accurate
, but for God's sake, just this week
the Supreme Court ruled in favor of an individual seeking to discharge student loan debt through bankruptcy. See
United Student Aid Funds, Inc. v. Espinosa, No. 08–1134 (Mar. 23, 2010), available at
Have you read this case? It is an extremely narrow ruling. It is mostly a ruling about a technicality. The previous court ruled and the Dept of Ed agreed (read did not object properly) that the student's INTEREST would be discharged in bankruptcy if the student paid the the principal. The student paid the principal and then the Dept. of Ed. tried to go after him for the interest again because there had never been an undue hardship ruling (something that is generally required to discharge student loans in bankruptcy). The Court ruled that the Dept. of Ed. could not go back to get the interest after the agreement was made. Anyway, this is not a case that makes it significantly easier to discharge student loans in bankruptcy court. These things are in the first paragraph of the ruling.
Also, student loans are not IMPOSSIBLE to discharge in bankruptcy. They are just more difficult to discharge than many other types of debt.
I'm not suggesting that Espinosa
stands for a more lenient interpretation of the bankruptcy code. I'm merely pointing out that the fact that is it widely accepted that where there is a showing that failure to discharge the debt would cause undue hardship, student loan debt can be discharged through a bankruptcy proceeding. As a result of the Espinosa
ruling, this rule has been discussed in some fashion by virtually every major media outlet in the United States over the past few days. Indeed, simply googling "student loan bankruptcy" yields nearly 1000 news articles produced in the past week alone. Unfortunately, despite this treatment by the mainstream media, recognition of this rule has apparently not yet penetrated the TLS echo chamber, a situation I hoped to rectify.