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1st Circuit Upholds Two Student Loan Discharge Cases

On Behalf of | May 2, 2018 | Bankruptcy, Blog |

Criticizes In Re Brunner as outdated and “hard-hearted”

Debtors filed separate Chapter 7 bankruptcy cases in Maine and Massachusetts with
Different fact patterns but with underlying similarities to undermine Brunner.

The First Circuit upheld the bankruptcy court when it ruled that both student loans were discharged. This Court criticized the Brunner and “totality of the circumstances” tests stating “Any test that allows for the Court to determine a student’s good or bad faith while living at a subsistence level, virtually strait-jacketed by circumstances, displaces the focus from where the statute would have it: Hardship. I believe this is the first crack in the iceberg moving forward towards resolving the billion dollars of outstanding student loan debt some of whom are calling the next mortgage crisis about to burst.

We believe and we would strongly argue the same legal principles the Court applied in this case to our bankruptcy judges here in Maryland.

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