Case: Student Loans Discharged in Bankruptcy Under Undue Hardship Exception (Bankr. W.D. Wis.)

Debtor’s private student loans were discharged in bankruptcy under 11 U.S.C. §523(a)(8) because requiring immediate repayment would impose an undue hardship on the debtor, a U.S. bankruptcy court held. Applying the standard set forth in Brunner v. N.Y. State Higher Educ. Servs. Corp., 831 F.2d 395 (2d Cir. 1987), the bankruptcy court determined that: (1) because of the debtor’s low-wage salary and limited future earning potential, the debtor would not be able to maintain a minimal standard of living if forced to repay the loan; (2) additional circumstances, including physical disability of the debtor’s spouse, indicated that such state of ...