110 West Front Street | Media, PA 19063
To speak to an attorney call: 610-566-6177

Bankruptcy Court Grants Discharge of Student Loans

In re Crawley, 460 B.R. 421 (Bankr.E.D. Pa. 2011)(J. Frank).

Four years after her bankruptcy closed, a debtor  reopened her bankruptcy and brought an adversary action to determine that she was entitled to an undue hardship discharge of her student loan.  The maximum salary the debtor ever made was $37,000 and she suffered severe medical ailments and periods of great financial strain which at one time was so bad, she lost custody of her children as she had no place to live.  She never made a voluntary payment on  her student loans.  Payments only came through wage attachment and IRS intercepts.  The court concluded that it could take into account facts which occurred after the case was closed and before it was reopened.  The monthly income for her family of six was under $1,633.  The court ruled that the debtor was able to show current undue hardship and that the hardship would persist in the future.  Finally, the court ruled that the debtor had acted in good faith even through she never made a voluntary payment nor applied to the income contingency loan program.  The court noted the debtor’s acquiescence of the voluntary seizures demonstrated that she was not attempting to “game the system.”  The court held that the student loans were dischargeable.

Post a Comment

Your email is never published nor shared. Required fields are marked *


Scott F. Waterman
110 West Front Street
Media, PA, 19063 USA