The Question of Undue Hardship

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The bankruptcy case of Janet Roth stirred a debate over the rigidity of the “undue hardship” standard in discharging student loans. This year, President Obama instructed several governmental agencies to review, by Oct. 1, whether the treatment of student loans in bankruptcy should be altered.

Questions:
1. How did Ms. Roth prepare for her case?
2. Do you agree with Judge Pappas’ ruling? Discuss.
3. What is the Brunner test?
4. Detail the history of discharging student debt regulations.
5. Were Judge Easterbrook and Judge Pappas the first to criticize the Brunner test?
6. Are there any tax implications to the debtor if the student loan is discharged? Explain.

Source:

Bernard, T.S. (2015). Judges Rebuke Limits on Wiping Out Student Loan Debt. The New York Times, July 17 (Retrievable online at http://www.nytimes.com/2015/07/18/your-money/student-loans/judges-rebuke-limits-on-wiping-out-student-loan-debt.html?&moduleDetail=section-news-0&action=click&contentCollection=Your%20Money&region=Footer&module=MoreInSection&version=WhatsNext&contentID=WhatsNext&configSection=
article&isLoggedIn=false&pgtype=article)

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