Bankruptcy Ruling Opens Door to Discharging Student Loan Debt

The 7th Circuit Court of Appeals ruled this week that a debtor could discharge her student loan debt in bankruptcy. Krieger v. Educational Credit Mgt. Corp., 7th Cir. Case No. 12-3592. Student loan debt is a category of debt that typically cannot be discharged. Allowing the discharge in this case is highly unusual. However, unless overturned on further appeal, the law set forth in this case is the law that Wisconsin bankruptcy judges will follow. The 7th Circuit was careful to limit the discharge to this particular debtor’s facts, but the decision certainly opens the door for future debtors to argue their student loan debt should be discharged. Read the decision here.

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