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Bankruptcy — student loans

By: WISCONSIN LAW JOURNAL STAFF//April 11, 2013//

Bankruptcy — student loans

By: WISCONSIN LAW JOURNAL STAFF//April 11, 2013//

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United States Court of Appeals For the Seventh Circuit

Civil

Bankruptcy — student loans

Where a debtor cannot pay her student loans, is out of the money economy and living a rural, subsistence life, and is not likely to acquire any assets or income, the bankruptcy judge properly discharged the student loans.

“In Roberson we boiled the three criteria down to ‘certainty of hopelessness’. 999 F.2d at 1136. That sounds more restrictive than the statutory ‘undue hardship,’ but at all events the bankruptcy judge found that Krieger’s situation is hopeless. That may be unduly pessimistic, but a judge asked to apply a multi-factor standard interpreting an open-ended statute necessarily has latitude; the more vague the standard, the harder it is to find error in its application. The ultimate finding of ‘undue hardship’ is neither clearly erroneous nor an abuse of discretion. The judgment of the district judge is reversed, and the case is remanded with instructions to reinstate the discharge issued by the bankruptcy judge.”

Reversed and Remanded.

12-3592 Krieger v. Educational Credit Management Corp.

Appeal from the United States District Court for the Central District of Illinois, McDade, J., Easterbrook, J.

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