Pursuant to 11 USC 523(a)(8), student loan debt
Pursuant to 11 USC §523(a)(8), student loan debt– as defined by that Section (which is almost all student loan debt, whether loan is by government, by a school directly, or by a bank)–is only dischargeable in bankruptcy if the debtor brings an adversary proceeding, in the debtor’s bankruptcy case, and wins that adversary proceeding, by proving that it would be an undue hardship on the debtor, or on debtor’s dependents, if debtor had to repay student loan debt the debtor owes, over the debtor’s whole remaining working life. It has been reported in the news that about 1/4 of all student loan debt in the US is in default. Recently, in In re Jorgensen __BR__, 2012 WL 3963339 (9th Cir. BAP 9/11/2012), the Ninth Circuit Bankruptcy Appellate Panel affirmed partial discharge of student loan debt, under 11 USC §523(a)(8)’s “undue hardship” standard, due to the fact that the debtor got cancer, and because the debtor got cancer, the debtor could only work fewer hours, even after the cancer was cured. Case discusses the 3 prong Bruner test for dischargeability of student loan debt.