What Does Bankruptcy Code Specifically Say About Student Loans?
By Jay Weller
Section 11 USC 523(a)(8) of the US Bankruptcy Code is the operative Section in regards to Student Loans.
Section 523(a)(8) States STUDENT LOANS ARE NOT DISCHARGED UNLESS:
Unless excepting such debt from discharge under this paragraph would impose an UNDUE HARDSHIP on the debtor and the debtor’s dependants, for-
(A)(i) an EDUCATIONAL OVERPAYMENT or LOAN MADE, INSURED, or GUARANTEED by a GOVERNMENTAL UNIT or NONPROFIT INSTITUTION; or made under ANY PROGRAM FUNDED in WHOLE or in PART by a GOVERNMENTAL UNIT or NONPROFIT INSTITUTION; or
(ii) an obligation to repay FUNDS RECEIVED AS AN EDUCATIONAL BENEFIT, SCHOLARSHIP, or STIPEND; or
(B) any other educational loan that is a QUALIFIED EDUCATION LOAN, as defined in Section 221(d)(1) of the Internal Revenue Code of 1986 {26 USC Section 221(d)(1)}, incurred by a debtor who is an individual
This is the full text as presented in the Bankruptcy Code, as the Bankruptcy Code refers to the treatment of Student Loans in Bankruptcy. I capitalized sections of the text because I am going to analyze these certain words of the Bankruptcy Code to demonstrate not only when Student Loans are Dischargeable in Bankruptcy, but also to demonstrate to you, how you can logically analyze Statutes and Codes, as written by Legislatures, for your own purposes.
In the next Blog Post, we will analyze the Text of the Bankruptcy Code as it applies to Student Loans.