Another Attempt to Student Loan Dischargability
To discharge your student loans in bankruptcy, you pretty much have to be in a coma. That’s not the technical rule, of course, but it certainly feels that way sometimes.
As a result, when attorneys who represent debtors talk about what changes to the bankruptcy law would most help their clients, fixing the “undue hardship” standard for discharging student loans tops the list. Every so often, a case comes along that begins the slow ascent up the appellate levels: Bankruptcy Court to the Federal District Court to the Federal Court of Appeals to (finally) the U.S. Supreme Court.
It’s a little bit like the Triple Crown in horse racing. The minute the Kentucky Derby is over, folks start talking about the hope of a Triple Crown winner. If the same horse wins the Preakness, people really start talking.
This last year, we watched with crossed-fingers the case of Tetzlaff v. Educ. Credit Mgmt. Corp. make its way to Washington and knock at the Supreme Court’s door to be let in. The process of an appealing party asking the Supreme Court to decide a case is called a “petition for certiorari”. The vast majority of petitions for certiorari fail, but whenever one is filed (like the Tetzlaff student loan case) that would have broad-reaching implications, people start holding their breath.
Last week the news came back that the Supreme Court would not hear the case. Every debtor’s attorney in the country exhaled gloomily. Another year, another failed attempt to ease the student loan burden.
Bankruptcy may not discharge student loans (yet) but bankruptcy can help provide protection.