A Bankruptcy Court in Illinois (In re Krieger, Bk C.D. Ill) has approved the discharge of student loans by a paralegal who was without prospects for future employment, homeless, had no income and was living on food stamps. Normally, student loans cannot be discharged under Bankruptcy Code Section 523(a)(8) unless discharging such debts would impose an undue hardship on debtor. As the economic downturn continues and long term unemployment persists, debtors will increasingly be able to show little to no prospects of future employment in order to be able to discharge student loan debt.
Bankruptcy Law Blog >