Student Loan Debt and Bankruptcy Many people argue that student loan debt should be easier to discharge in bankruptcy, since millions of students leave college with student loan debt almost every year. Although many may argue it has become a challenge to discharge a student loan debt, as in 2007, there were 169,774 bankrupt debtors who owed student loans to one of their ten lenders. Ever since 1978, Congress has placed strict limits on the dischargeability of student loans pursuant to the Bankruptcy Code (Forrest). Although people may be struggling with a bankruptcy and are in desperate need of help, there are only certain types of debt that can be exempt from discharge. There are a variety of rules concerning certain types of student debt can be exempt. There is in fact a general rule, that the discharge will forgive pre-bankruptcy. However, there is an exception to the general rule: certain statutory criteria the educational debt must meet, and of course, educational debts that impose undue hardship. If the debtor is trying and make their claim of undue hardship, what exactly do they have to show? The ‘Code’ shows that undue hardship is standard. Congress has not been able to define “undue hardship”, so the courts must come up with a variety of tests to help determine whether a debt should be …show more content…
“The mere thought of having thousands upon thousands of dollars worth of debt can severely impact a person’s mental health, especially if they will carry that debt for the rest of their lives.” It’s difficult to keep a calm mind when a person is aware they have a debt and are in bankruptcy. Additionally, “High debt may lead an individual to work overtime or find a second job, thus producing additional stress” (Mullins). Although, a debt might not be much of a physical problem it can easily become a mental